3 stages of APP user growth!

Today I’m going to join in the fun and talk about the “ three stages of user growth ” from a product perspective. The article will be divided into two parts for a systematic explanation.

First, let’s talk about some basic understanding of growth.

When it comes to growth, many people have misunderstandings, which are mainly reflected in the following categories:

• The first type thinks that growth is fission, and that doing a few fission activities is growth;
• The second type thinks that growth requires proficiency in technology. This is because they often see articles online saying that someone used a certain technology to crawl a certain amount of things and achieved some good growth results.
• The third category thinks that growth requires great data analysis skills, and that you may need to understand various algorithms and analysis methods, such as clustering and regression analysis. (In fact, I would say that knowing addition, subtraction, multiplication and division is enough to get started with growth.)
• There is another type of people who think that growth is a secret and a shortcut. Many company bosses think that by introducing a growth team, they can see product data rising rapidly, like the "Sunflower Manual" of the product industry.

Of course, the above understandings of growth cannot be said to be all wrong, it can only be said that the understanding is somewhat narrow and one-sided.

So what exactly is growth hacking?

Different people in different positions will have different understandings of growth. For example, product development may be understood as the growth of DAU, operations may think it is about organizing some activities to attract new fans, design may think it is related to data, and most of the technology may not even have this concept.

But in fact, from the understanding of Sean Ellis, the founder of growth hacking, growth hacking is more of a concept (methodology), process, and team collaboration; to put it more simply, it is the core concept that everything takes growth as the ultimate goal, is user-centric, and relies on rapid experimentation and data as king.

So why do we want growth?

One of the reasons is the continuous decline of the Internet demographic dividend. The picture above is a report made by the Queen of the Internet this year. From the picture we can clearly see that the growth rate of Internet users has been getting lower and lower, and will soon be close to no growth. In the early days of mobile Internet, you could just do any project and the new additions wouldn’t be too bad, but it is extremely difficult now.

On the other hand, there are many awesome products in the early days of Silicon Valley that have achieved rapid development through growth. This gives some inspiration to latecomers: if our own products also introduce growth-related things, do we have the opportunity to become as awesome as our predecessors?

From a product perspective, I prefer to divide user growth into three stages: PMF period, pirate period, and scale expansion period. Each period has its own characteristics, which I will explain systematically in the following section.

Phase 1: PMF period

Now we are entering the first stage of growth - the PMF period.

What exactly is PMF? This concept was actually first proposed by Mark Anderson in his blog. What is the definition of this concept? It is "in a good market, one product can satisfy this market." You can see the picture on the left. There are two circles in it, one is the product and the other is the market. The intersection of the two circles is the part where the product and the market match. Look at the picture on the right. What does this picture say? It says that a product actually has a name before it reaches PMF, called "BPMF", which means Before PMF. After reaching PMF, it is called "APMF", which means After PMF. In fact, you can clearly see that before a product reaches PMF, the growth curve of the entire product is very flat, and after reaching PMF, it becomes steeper.

Therefore, PMF is actually a very important concept and can be regarded as a turning point for product growth.

Since PMF is so important, let’s take a look at its main types. There are three main types:

The first category is to satisfy an existing market with a better product experience, such as Toutiao and Slack. When Jinri Toutiao was launched, there were already many news apps, including the three major portals and Tencent News. However, the mainstream approach at the time was to recommend content through editors, not through algorithms. Jinri Toutiao seized a large market share by relying on algorithm recommendations.

The second type is to use a product to meet an existing but partially unmet market demand, such as UBER and Didi;

The third type is to use a product to create a new market. For example, before the emergence of Twitter and Weibo, people did not know that there was such a way for idols and fans to interact and for information to circulate so quickly.

Some bigwigs in the industry also made such remarks - PMF is the only important period in the early stage of entrepreneurship; which means that after we understand the several types of PMF, we must find our own PMF as soon as possible. In fact, the process of finding PFM is the process of sorting out product models and business models, but for most product managers, there is no need to do this (or there is no opportunity to do this), because the boss has basically thought about it, unless a new product is incubated within the company.

Here I would like to introduce to you a canvas diagram, which is the business model canvas diagram. Through such a diagram, we can build the product model and business model of our product. As for how to build the product model, I have actually already talked about it in a special section in the book "Product Journey". If you are interested, you can take a look.

Generally speaking, in the process of exploring PMF, we will use MVP to verify market demand. To give a simple example, if you want to set up an orange juice vending machine in the subway, you could first buy some oranges and put them at the subway entrance to see if anyone would buy them.

After doing so much exploration work, we can use some data indicators to observe whether our product has really achieved PMF. You can see that for C-end products, we generally require users to use them more than 3 days a week, increase daily active users (DAU) to more than 100, have a next-day retention rate of 30%, and reach 100,000 users. However, the data for C-end products in different industries will also be different, so everyone should still look at it based on the attributes of their own industry. There is no need to explain the B-end, you can understand it by looking at the picture.

So in general, the core feature of the PMF period is that the product is the forerunner, and more operations work is actually to help the product with a cold start. Another thing I want to emphasize is that PMF is actually the cornerstone of growth. Before reaching this critical point, all growth behaviors are meaningless.

Judging from my own practical cases in the two figures below, they are indeed very similar to the Before-PMF and After-PMF curves we talked about before. The front is almost flat, and then it starts to grow steeply. Any new product is bound to go through a journey of exploration. Just like everyone has to find his or her own place and destination, products also have to find their own positioning and position in order to better survive in the fiercely competitive market.

Author: Brother's Notes

Source: Brother's Notes