One of the key lessons I’ve taken away when listening to other startup founders who are early on is to judge the model more than the idea. Someone who understands how to structure an effective product model will eventually land on the right idea given enough time/resources. But someone with a great idea that has no understanding of how to put together a good product model is in for a rough ride.
I’ve put together a user acquisition/retention checklist for your site’s product model (not business model, I’ll follow up with a business model checklist some other time).
2. Immediacy of return
3. Degree of user behavior change
4. Chicken/Egg problem
5. Value of product
Price is pretty self explanatory. If your product is free, more people will use it. If your product costs a lot of money, less people will use it.
With immediacy of return, there are studies that have shown people would rather receive $10 today than $20 in 3 months. The longer the latency between action and return, the less sticky your product will be.
Even if your product is free and provides an immediate return on action, if it takes the user too much effort to complete the action, most won’t start, and even fewer will become dedicated.
It takes two to tango. Your product should not be a tango. If you have no way around building a product that has a chicken/egg problem, make sure that there is at least some degree of value provided to the user without the engagement of someone else.
Value of product is the hardest to define and of course its completely subjective. The only way to measure this is to build a prototype and test it out or do extensive surveying. Simply put, you need to fulfill a need or create one. The best end user products seem to tap into our vanity. (I wrote a post a few months back on assessing the value of your offering. http://bit.ly/bVZDJL)
So I just gave you a checklist, now lets apply it. I’m going to use Foursquare as an example.
Foursquare is a free product and although there is a chicken/egg problem to get the complete experience, they were very smart in piggybacking off of Twitter to broadcast your location. This takes advantage of a user’s vanity which, as mentioned, is a proven motivator in driving user acquisition/retention on the web. We already had real-time life-casting and mind-casting. Foursquare provided us with real-time (immediate) place-casting.
The degree of user behavior change is very minimal. It takes less than 15 seconds to complete the action (check-in) for the product model to work.
There are plenty of things I left off the list such as having built-in virality, but that doesn’t relate to all products and in some cases its more a feature than a part of the model. There are probably a few things I also just didn’t think of so feel free to add to the list.
Update: Someone brought up a great value, saving users money. So the obvious product model to analyze here is Groupon. It’s free to receive the daily emails which clearly state the deal in the subject so there is almost no behavior change. If you see a great deal, you can immediately buy it and with Groupon you’re almost guaranteed there will be enough people to trigger the deal. It’s a symmetrical model meaning your users are paying customers so its also a great business model.