Sarah’s background
- Sarah Tavel is a partner at Benchmark, focusing on investing in consumer and marketplace startups
- She was the first product manager at Pinterest and has a background in product and growth
Framework 1: The Hierarchy of Engagement
- Tavel introduces two frameworks for building a startup: the Hierarchy of Engagement for customer businesses and the Hierarchy of Marketplaces for marketplace businesses
- The Hierarchy of Engagement focuses on the criticality of engagement over vanity metrics
- The framework emerged from Tavel's experience at Pinterest, where she led the discovery team and focused on increasing engagement
Level 1: Core action
- Social products have a core action that forms the foundation of the product, such as friending on Facebook, pinning on Pinterest, or sending a snap on Snapchat
- The completion of this core action signifies an engaged user, and other actions are secondary to this core action
- It is crucial to pick the right action that scales to enough users, and the new user experience (NUX) should lead to this core action
- Founders should focus on the levers to improve and think holistically when designing and optimizing the product
Level 2: Retention 10m33s
- It's crucial to ensure that users stick around after completing the core action
- Products should improve with increased usage, creating more value for users
- Examples of products that become more retentive with use include Pinterest and Evernote
Level 3: Self-perpetuation 14m0s
- The goal is to make the product self-perpetuating, converting user activity into a better product experience
- Utilizing network effects and growth and re-engagement loops can help in achieving self-perpetuation
- Examples are provided of products like Pinterest and Evernote in relation to self-perpetuation challenges
The importance of focus
- Focus is crucial for building successful companies
- To achieve mass-market success, consumer products need to spread organically with low acquisition costs
- TikTok spent over $1 billion on paid ads to reach its current user base
- New social products struggle to compete with dominant forces like TikTok and Instagram
The challenge of anonymity
- Anonymity hinders the accruing benefits and mounting losses that drive engagement
- Anonymity often leads to bad behavior, causing products to not persist without persistent identity
Advice for founders who want to increase retention
- Measuring and tracking cohorts is essential for understanding user behavior and retention
- Focusing on a specific geography can help create a high retention product
What founders often get wrong
- Founders often overload their product at the beginning, diffusing user attention from the core actions
- Failing to focus on the activation moment and the core action can be a significant mistake for founders
Examples of Core Actions
- Pinterest's core action was pinning something, leading to high return rates
- YouTube's core action evolved from watching videos to subscribing
- The core action should serve both sides of the network, creators, and viewers
Finding your North Star Metric
- The North Star metric of a company tends to be the core user action, like Pinterest's weekly active pinners and YouTube's subscribers
Who should use the Hierarchy of Engagement framework
- Consumer founders, product leaders in companies can prioritize the roadmap using the framework
The Hierarchy of Marketplaces Framework
- Aimed at marketplace founders prioritizing important aspects for scaling the marketplace
- It challenges the focus on just growing GMV and emphasizes building enduring value through market focus and customer proposition.
