Tag Archives: Consumer Internet

Rethinking Facebook Connect

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As startups we need to continuously experiment and question the status quo; and for now we experimented with the Facebook Connect implementation. We started by removing it as default option to sign-in on Wishberg. As expected we got multiple forgot password requests (we built this feature in anticipation of same).  

Many folks questioned about this on Twitter, and I also had conversations with other startups founders who suggested this could be a bad move. So far we are happy with the results. We may / may not revert back (its still not clear) – but since many people asked me why we even thought of experimenting – here are the reasons.

a. Facebook is no longer a powerful distribution platform 

Let me sum up Facebook as a distribution platform for you:
Early days -> 1 + 1 = 11
Later ->  1 + 1 = 2
Now -> 1 + 1 = 1.1
Next -> 1 + 1 = 1.01

Face this, it is true. Facebook is no longer a powerful distribution platform or user acquisition channel for application developers. If the expectation is one user registration through Facebook connect will lead to at least one more., its not happening. 

Zynga achieved its distribution on Facebook through News Feeds; Branchout through notifications and others like Pinterest / Spotify through Open Graph. When more and more applications tried to ‘abuse’ each of these mechanisms Facebook put more restrictions & controls in place (which is correct since Facebook wants to maintain a clean experience for its users). Open Graph is currently the only way to get some effective distribution, Facebook has replaced few custom actions and asked developers to use built-in actions for Like & Follow, they are also merged in Open Graph. It also placed restrictions for applications that abused few actions like ‘read a article’ & ‘viewed a video’ with more controls / validations in place.

Personally I am against spam and to build a clean product we do not aim to spam our users through Facebook (even in name of user acquisition). Also because of the fact that few applications have abused Facebook to acquire users, users are smart and know how to differentiate between a possible spam and genuine link. Good for consumers and bad for developers, Facebook has made it ‘ridiculously easy’ for users to get rid of applications; so if your are spamming – do that at your own risk! 


b. Facebook engagement principles – P2P v/s A2P

You must have read this in news over and again – Facebook is trying hard to appeal to the current youth generation (as the earlier one has grown up!). While Facebook is trying to appeal to younger generation, it is also trying to improve engagement of its current user base. Current reports suggests that a Facebook update reaches approximately (just) 12% of your friends. 

If people stops engaging with other people on Facebook, it will be dead. While Facebook connect is a good way to keep social interactions that happen outside of Facebook discoverable through feeds on Facebook – its natural that Facebook will always be more inclined to have P2P (People to People) interactions featured over A2P (Application to People). 

On a personal note – I don’t think Facebook will have anything great to announce for some time ahead that will excite the developers. For now, FB will focus on improving user-to-user engagement, appeal to youth and its monetization products. So I don’t see the situation improving for developers. 


c. Inconsistent Discovery Experience for feeds

Facebook is not Twitter. Unlike the experience where every tweet is visible to your followers, every feed / status update is not visible to your friends. Its complex and depends on multiple factors – whom you interact with most, which group of friends are you a part of, has the feed gone viral to be showcased to more people outside that network and so on. If P2P feeds are discovered by only 12% of friends, chances for discovery of application feeds will be even lower.

And then there are innumerable pages that a user has liked, there are updates from them which also ask for a mind-share of user in his activity stream. One of Facebook’s monetization product that allows pages (and users) to pay and increase reach of their posts will also work against discovery of application feeds.

Facebook recently announced a new newsfeed which is rolled out to few users but not to all. It has also did a nice little revamp on Timeline view of profile putting all updates on the right side block – and also bringing up user’s likes and interests upfront and pushing open graph updates further down to an blind spot.

Don’t get me wrong here, I am supporting Facebook here as most of these changes are done to improve user experience and engagement for its own users. But in that attempt – the discovery of feeds for applications has got bit inconsistent. There is no science here – and most of the times for application developers it will mean shooting in the dark. 


d. Every user has his/her own identity on every platform

Each user has a different identity on every platform – Facebook, Twitter, Quora, Foursquare, LinkedIn and so on. Its incorrect to assume that the way a user behaves on Facebook will be essentially the way he will on your product or that he wants his friends to know he is using a particular product or service.

There is also a trend that users do not want to register on a product because it only allows only Facebook Sign-up. We did that with Wishberg earlier, but now have opened up email registrations; key here is – ‘Be valuable first, social later.’

The ideal way is to allow users to register and let them connect their Facebook account as a option – which they will if your product is valuable to them. You can prompt users to connect their Facebook account, but not force them to do so!


e. Psychology of Forced Distribution

As a developer once you implement Facebook Connect, unconsciously you get thinking and start relying completely on Facebook for distribution. You want every action that has happened on your product to be ‘forced shared’ on Facebook – even though a user would want it or not. Its time to stop that as the sharing economy has changed.

Since Facebook distribution is not controlled by you, it gets increasingly frustrating when your product does not go as viral as you thought it would. Instead build some sort of distribution / discovery mechanism on your own product which you control completely – we built couple of them on Wishberg and they have worked remarkably better. Remember – a small number of highly engaged users are much better than a large user base with zero or near zero engagement. 


f. Sharing economy has changed

The sharing economy on Facebook as changed over years. It is no more driven by features or applications, its completely user driven. Users have got smart enough to know what has to be shared and with whom.

Don’t build applications / features that will trick users to forcefully share something on their wall without their consent or knowledge. Focus on your product – users will figure out what they have to share and what they don’t have to. Users are now smarter than most developers think! 


g. Breaking changes that break your plans

While doing a startup / building your product – the one thing you don’t want to lose is time. Startups operate with small teams and any deviations from the product roadmap costs them dear.

And while they are on to it – Facebook wants you to constantly be updated with its latest ‘breaking changes‘ and there is no option but to comply. It sucks out time / bandwidth big time and knowing the diminishing returns from Facebook – it gets frustrating here!

 

Concluding Notes:

Most product managers integrate with Facebook Platform for three reasons – 1. One-click sign-in 2. Social Graph. 3. Distribution (Viral acquisition of users).

It is possible to achieve that without Facebook too.

  1. One Click Sign-in: Create a perpetual logged-in experience for users till he explicitly logs out!
  2. Social Graph: Most successful products like Quora, Twitter, Instagram, etc have build their own network / graph. Remember that same user will have a different identity on every different network.
  3. Distribution: 1 + 1 = 2 is no longer true. Think of discovery and distribution on your own product, you have complete control there.

The aim of this post is not to put negative remarks against Facebook, but to make fellow entrepreneurs know of this when they are building on top of Facebook platform and so that they set right expectations for growth. Happy building!

Update:  We got Facebook Connect back on Wishberg after 30 days of experiment. The main reason was not distribution, but authentication – users do not have to remember one more password! As far as distribution is concerned, Facebook adds little value.

 

Before you start with Growth Hacking

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Note: This post is extension to my recent tweet on Product Management.

Building a product startup is exciting. Most startups look to raise capital early and investors look no other measure but traction to take their bets. This need for traction puts immense pressure on the founding team to grow their startup. That leads to implementing multiple tips and tricks to improve the key product metrics – most importantly to show traction to investors. Founders get into the so called ‘growth hacking’ mode. 

Growth hacking is the new buzzword in the startup town. There is nothing wrong with ‘hacking growth’ – most of the tricks attempted in this phase end up being short-term techniques. They might work for a while, bring traction for a while (which might lead you to raise investments) but these techniques don’t help in long term and the growth is not sustainable and quickly falls off.

Startups tend to neglect the simplest rules of product management before starting with growth hacking. According to me, here are the 5 Basic Rules of Product Management:

  1. User Engagement > Growth Hacking
  2. Retention > Acquisition
  3. Context > Activity
  4. Own growth channels > External channels
  5. Being Valuable > Being Social
A. User Engagement > Growth Hacking
Remember startups like BranchOut, Glassdoor, Viddy, Socialcam – that famously hacked growth through Facebook Dialog Feeds? Though they showed amazing growth curve initially, it soon fell off. Most users dropped off the product as quickly as they signed up never to return again. Reason – zero engagement on the product. Ensure that there are enough engagement loops on the product before you do any sort of ‘growth hacking’.

B. Retention > Acquisition
Acquiring users is the simplest thing to do, retaining them is the key. Any user acquisition technique should retain a good percentage of acquired users. Not just that., over a period of time the users who dropped off should be reactivated – there should be enough methods to pull them back – emailers / network effects / and so on. If the product has strong engagement features, retention is a easy task.

C. Context > Activity
Most products undermine the importance of context. In today’s world – anything that is not context is considered spam. The finest examples of a context driven product is Quora that lets you follow topics of your interest and helps you discover relevant content. Also important are products like Twitter (that lets you follow users) and Pinterest (that lets you follow boards) to build a information stream in context thats relevant to you. Think of context when you build features.

D. Own Channels > External Channels
Many startups focus on external channels for growth. Branchout was focussed on Facebook Dialog Feeds, Zynga was focused on Facebook Activity Wall, Viddy was focussed on Facebook Open Graph. Perfectly fine – if there are enough engagement loops and good retention strategy. However depending on external channels might not be sustainable – many startups hacked the Facebook Open Graph to get significant users – this led to users complaining about to the noise on Facebook wall, Facebook in return built many approvals / controls to prevent applications from spamming the users and giving users ease to block spam applications.


Large startups like Facebook, Dropbox, WhatsApp were completely focussed on driving growth through channels owned by self and had very little or no external dependence for growth. Don’t depend too much on external platforms like Facebook, Twitter, Google (SEO) for growth – build our own channels. Facebook’s journey of growth hacking is well documented. Also Dropbox as mentioned in next point. 

E. Being Valuable > Being Social
There are also startups that focus on building ‘too-many’ social sharing features, expecting users to share almost everything and anything on to their social profiles (Facebook, Twitter, etc). Users are smart – they don’t fall in this trap and founders keep wondering why no social sharing happens. Instead of trying to be forceful on social, focus on being valuable. 

Example –  Dropbox, it was a very valuable product that had super methods to hack growth – by connecting FB or Twitter account with Dropbox and providing users additional storage space by asking them to spread a message to their social circle or invite email contacts.

Concluding Notes:
Can you hack growth first and implement these rules later? No. There are startups that hacked user acquisition and raised initial investment on traction., and later things did not go according to the plan. Not just startups, that leaves even investors wondering what went wrong after the initial impressive growth metrics. 

Startups are about growth, no doubt. Getting Techcrunche’d (PR release), top position on Hacker News or Video that goes viral might bring one-time traffic boost / user sign-ups. You can get good amount of traffic by integrating with Facebook Open Graph, optimizing site for Google (SEO) or even paid user acquisition – but make sure that the product has enough engagement, retention loops, value and context to sustain the users you are acquiring!

You may hack growth., but you can’t hack success. Building the next billion dollar company is a big deal!

Why Consumer Social Products should monetize at Scale

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This post is written in context of – why consumer social products should never monetize without scale.

1. Because Users sign-up in context of Product –
Every social product is more about users and their connections / contacts together with a context (its product use-case). Users expect to interact with their contacts with this context.

For Zynga, the context is playing games; for Quora, the context is asking questions. At this stage – nothing is more important that making the context important. Focus on building the product.

 

2. Because Engagement is more Important –
Only value a social product should provide to users is engagement (both frequency and quality is important). Hence, the only metric that matters for any social products is engagement. That should be prime focus for any social product in its initial 24-36 months.

Over a period of time this engagement should evolve in to habit. Habits are tough to break. Facebooking, Tweeting, Checking-In are habits.

A QnA site like Quora with about 1 Mn ‘engaged’ users is more valuable that 50Mn+ users on Google+ who don’t talk to each other..

 

3. Because you need to Learn from Others’ Mistakes –
Learn from successes and failures of other products. All (successful) social products monetized at scale, till then they were just building the product and even continue to do so today.

Majority (if not all) of social products who tried to monetize early have hit the dead pool or pivoted.

Don’t want to name any specific failures, but look around – there are many social products that attempted to monetize in its early days.

 

4. Because your Users won’t like it –
You like it or not – large social products & platforms eventually monetize with advertising products but with its own product context. Facebook did with advts targeting by demographics; Twitter with promoted accounts, tweets & trends; Foursquare by local advertising deals for check-ins; with a exception of Zynga that sells virtual goods.

At early stage, users would expect a better product experience; not advts. If you plan to monetize with transactional services like eCommerce – think about it. Will users want another service that spams them through sms / email or advertisements? You don’t want to put off your users.

It is a tough decision with a simple answer – Focus on what users want; not what you want or what your investors want.

 

5. Because your Merchants or Business Owners won’t be happy with you –  

This is strange but true. Let me explain this with example – Imagine a hypothetical social product for shopping with 100,000 registered users. You sign-up with the top-20 eCommerce sites in India for monetization through affiliate model – you pat your back and give yourself a thumbs-up.

– Assume decent engagement levels @ 50% user base (50% of users login minimum 2 times a month).
– That is 12,500 users per week logins
– Take standard 1% ratio of conversion at merchant end
– Gives you 125 transactions per week; 500 per month
– That is about 25 transactions per merchant ~ approximately less than 1 transaction per day for eCommerce partner.

Consumers will not do eCommerce transactions every month. Next month, this picture might be more difficult.

4 of these 20 eCommerce services says, “Sorry! its not worth our efforts on integration and time spent. Please delist us.” Community is small, people change jobs fast and the word spreads quickly amongst the partners – “This product does not work!”

Now, the same scenario at scale;

– On a 1Mn user base: 8-10 transactions per day to every partner
– On a 10Mn user base: 80-100 transactions per day to every partner
– On a 100Mn user base: 800-1000 transactions per day to every partner. OMG!

Exercise extreme caution when you decide to monetize your social product. The timing is as important as how your monetization plan.

 

Also because Sean Parker said so –
From the movie – The Social Network. When Mark Zuckerberg, Sean Parker and Eduardo Saverin discussed on TheFacebook’s monetization in its early days –

Eduardo Saverin: Hey, you know what? Settle and argument for us. I say it’s time to start making money from TheFacebook, but Mark doesn’t want to advertise. Who’s right?
Sean Parker: Um…neither of you yet. TheFacebook is cool that’s what it’s got going for it.
Mark Zuckerberg: Yeah.
Eduardo Saverin: You don’t want to ruin it with ads because ads aren’t cool.
Mark Zuckerberg: Exactly.

—

Sean Parker: “You don’t even know what the thing is yet.”
Mark Zuckerberg: “I said that exactly.”
Sean Parker: “How big it can get, how far it can go. This is no time to take your chips down. A million dollars isn’t cool. You know what’s cool?”
Eduardo Saverin: “You?
“A billion dollars.”
 That shut everybody up.

This holds true for every social product. You don’t know really know how a product shapes up it its journey that starts from minimum viable product.

Note: Sean Parker has said that the movie The Social Network is work of fiction.