How to increase users?

In this article, I will briefly summarize my past experience of learning from experts such as Ed Baker and Andrew Chen in the Uber growth team, and my experience of leading the business at Mobike . While trying to avoid revealing any business secrets, I will talk about the current thinking in the industry.

It is a long article and is divided into the following four sections:

1.What is user growth ?

2. What did the company do during the outbreak period? (Mobike example)

3. What is the system of a mature company? (Uber example)

4. How to go from zero to one?

Over the past year, many friends have told me about their entrepreneurial ideas and asked me what else they can do in the post- Internet entrepreneurial era. I always say that 2017 is the moment when the price of online traffic has reached a critical point. Now starting a business must meet one of the following two conditions:

a. Either they can extract high value from each user (High LTV, such as cash loans and big games );

b. Either there is a customer acquisition channel that is so cheap that it costs almost nothing (Low CAC).

If you cannot find a monetization method that makes sense in terms of unit economics, or if you do not have a unique customer acquisition channel , do not quit your job or return home easily. The future of the Internet industry belongs to the giants (TATBMD ranked in order), not to entrepreneurs .

For example, a friend of mine got angel investment from Xu Xiaoping to build a skill payment platform (comparable to Thumbtack). It was very sophisticated and operated very well, but it cost nearly 100 RMB to acquire an effective user, and it didn’t generate any organic volume, so it closed down last year. Similarly, a download activation (CPA) for a big strategy game on Toutiao now costs 120 yuan, which is so expensive that it makes people question their lives.

This is why when you check the headlines, the ads you see are almost all about pay-to-win mobile games (Tianwan Blue Moon, Chu Liuxiang), English training, and used cars . Without exception, they all meet the condition a that I mentioned. They can make a lot of money by getting one user, so they can afford to buy advertisements directly at a high price.

Why did Mobike and ofo rise in 2017? They meet condition b. In fact, the two companies hardly run information flow ads or app store performance ads. Most of their effective customers come from QR codes on the bodies of cars at subway entrances, bus stops, and roadsides. Therefore, both companies have placed a large number of advertisements in subway stations and bus stops to strengthen their main customer acquisition channels, so that users will choose their own products instead of their competitors when they come out of the subway.

In the post- mobile Internet era, the most important means of production are traffic and capital, and it is difficult for technology and products themselves to form barriers (such as AI , VR / AR , and blockchain ). Take Tik Tok and Muse as an example. The two products look exactly the same, but their unit data (customer acquisition unit price, retention time) differ by several times, and after a period of time, the number of users differs by thousands of times. Although Tik Tok copied Muse (http://Musical.ly), the apprentice won. As expected, in November, Toutiao (TikTok’s parent company) acquired Musical.ly. The latter was a typical case of being unable to win and had to surrender to a giant. Fortunately, the number of overseas users was large enough and the price was not bad.

Readers may ask, how come the data of this pixel-level copied product is so different? This is the difference between a down-to-earth team of experts and a team that is not up to standard or out of touch with reality. In this era, it is very important to have a reliable growth team and growth methodology. In this article, I will summarize my past insights from learning from experts such as Ed Baker and Andrew Chen in the Uber growth team, as well as my experience in leading the business at Mobike, and talk about the current thinking in the industry.

1. What is “growth”?

Growth refers to using a programmer ’s mindset to do marketing for mass Internet products . The first wave of Internet companies hired traditional advertising agencies and marketing directors. More than half of the ads in the 2000 Super Bowl came from Silicon Valley. Later, during the bubble, almost all of them went bankrupt. When Jack Ma promoted Taobao in 2003, he also used television ads, print media and outdoor advertising at the beginning.

There is a famous saying in the traditional advertising industry: "I know that 50% of this advertisement is wasted, but I never know which 50% it is." Gradually, people discovered that Internet products can be made using new methods. Engineers can be taken charge and use product iteration and AB testing to reduce waste, increase conversion rates , and eliminate "self-entertainment advertising." In China, this is called traffic strategy.

2. What should companies do during the outbreak period?

I experienced the period when Mobike went from 3 million orders per day to 25 million orders per day. Before the explosive period, the founding team had found a smooth customer acquisition channel: register by scanning the QR code on the bicycle body at the subway entrance. Until I left Mobike, this customer acquisition channel remained the largest and most effective source of new users. With a deposit of 299 yuan and multiple deposits per bike, Mobike has achieved a magical positive cash flow model:

Cost per vehicle < Deposit * Number of people with deposit per vehicle

Acquiring customers can also generate positive cash flow! Such good news would make every Internet person wake up laughing in their dreams. As a result, veteran investment institutions such as Sequoia Capital, Gaoling Capital, and Tencent have entered the market.

Now that the unit economics have been verified, the second step is to expand operations while improving efficiency. So we continued to increase the number of vehicles deployed and at the same time worked to improve the activation conversion rate.

In the new user registration process, we use GrowingIO to look at the churn funnel of each page. After understanding it clearly, I decided to remove the guide page and change the previous four steps of mobile phone verification, deposit, ID card, and invitation to three steps. Placing the deposit before ID card verification is a very clever design: for users, after paying a deposit of several hundred yuan, what does privacy matter? So the conversion rate of this step is very high.

What I just said is the case where the app has been installed. In actual usage scenarios, the step that has a greater impact on conversion rate is downloading and installation. Since everyone was outdoors and traffic was limited, many people closed the page when they saw the link to the app store. Mobike was the first to create a WeChat mini program , and replicated the revised new user process in the mini program , which further increased the conversion rate. How exaggerated is this channel? Tencent told us that over the past six months, more than 50% of all traffic on its mini program came from Mobike.

After optimizing customer acquisition and activation, it’s time to improve retention and activity. There are many strong competitors, and our primary goal is market share. In 2017, we all saw how the veterans fought the subsidy war: well-trained, hitting the mark with every move, and spending money without blinking an eye. During this outbreak period, we have done the following things in summary:

Rebate – Free Day – Red Envelope Car – Fission Free Day – Easter Egg Car – Treasure Box Car – Red Envelope Car v2 – Membership – Monthly Card – Monthly Card v2 – Red Envelope Car v3 – Monthly Card v3

To sum up, what Mobike does basically conforms to the AARRR model. It has found a good customer acquisition model (Acquisition), used various methods to improve activation (Activation), and then used the product matrix to achieve retention (Retention), engagement (Engagement) and friend recommendations (Refral) . Since the technical threshold is too low and the competition is too fierce, I think it is very reasonable to directly skip the revenue step in AARRR. In this kind of market, the only way is to step on the accelerator to grab market share, obtain further financing , and rely on giants. You must not rashly increase revenue before the battle is over.

3. What is the system of a mature company?

I used to write code in the growth department at Uber headquarters. I started out working on user engagement and later led the loyalty program. The director of our department, Andrew Chen, is an internet celebrity who has been writing about how to achieve growth for more than a decade. Eric Ries, author of The Lean Startup, said that his blog is “One of the best entrepreneurship blogs of all time.” At that time, Kalanick acquired his failed company directly in order to recruit him to Uber. Because of his good blogging skills, he met Marc Andreessen in his early years. In 2017, Kalanick was forced out due to internal fighting, and everyone was very depressed. Last month, Andrew left Uber and joined a16z, a rising venture capital firm in Silicon Valley, as an investment partner. He made a particularly good point:

• All growth tactics are becoming more and more overused and less effective (law of shitty clickthrough rates)

Therefore, everyone keeps effective methods to themselves, and all the methods written in blogs are outdated and not very useful. So overall, the growth department cannot rely on one or two magical techniques, but must have a systematic and organized methodology to discover, verify, and promote new techniques.

When I joined Uber, it had just started a reorganization (re-org), breaking up the corporate structure that was once divided by job type and creating independent business units with a complete set of products, front-end, back-end, operations, and data. I had planned to follow my LinkedIn boss into the mobile group, but ended up getting assigned directly to the growth department. In fact, this reorganization was led by Ed Baker from Facebook. There have been several reorganizations since then, but overall, our growth department is divided into four small teams:

Attract new customers , activate, be active, and retain customers

When Andrew arrived, he saw that there was no friend invitation function, so he added a group:

Acquisition

Activation

Engagement

Retention

Referral

Let’s talk in detail about each department’s KPI, what attempts have been made, and what techniques are available.

Acquisition:

Retention:

Active Engagement:

4. How to go from zero to one?

The biggest difference between mature companies and startups is that startups don’t know whether they have found Product /Market Fit (PMF) and don’t have a clear customer acquisition channel. The key is to create this growth flying wheel (refer to the one drawn by David Sachs).

Anyone who has read The Lean Startup knows that there is only one way for a startup to die: when it runs out of money. At this stage, if you find PMF and establish growth momentum, hot money will definitely come to you crazily. Therefore, happy companies have all kinds of happiness, and unhappy companies are all equally unhappy:

• The money has been spent, but real demand and continuous growth have not been found.

No growth is the curse of startups. As long as there is no growth, the user base will shrink and things will gradually become more and more bleak. Take Renren and Jumei for example. In contrast, Tencent and Facebook have both achieved 1 billion daily active users, and the number is still growing as if there is no end.

The topic of finding true needs is so vast that it is worth writing another article. This article focuses on growth. How can we find continued growth before the money runs out? The old 80-20 rule and Andrew Chen's rule that things get worse the more you use them.

The 80-20 rule states that in each period, 80% of each product’s customers come from the same channel. The rule that the more you use it, the worse it gets means that if you find a very efficient channel, you must not sit back and relax. The good days will only last for 3 months to 3 years and will soon become ineffective.

These two rules must be implemented in conjunction with the startup’s capital chain. Startup companies are so short of money that every penny has to be spent carefully. In three steps:

• Cast a wide net and try all possible customer acquisition methods at the lowest cost (no more than tens of thousands of dollars) to get the golden water pipe that is reliable at this stage.
• Open the gold water pipe to the maximum, and also open the surrounding silver water pipes.
• Before the gold water pipe is about to break, repeat the first two steps

Creativity is important, and conforming to product characteristics (Synergy) is important. The most effective ways before were fission red envelopes (Pinduoduo, Didi , Mobike) and invitation-to-voucher GXGY (Didi); new methods are emerging in an endless stream. Remember, good methods are always used less.

In addition, Cheng Hao said some time ago that all successful startups have benefited from a wave of dividends, so the trilogy must be done according to the times. Back then, Zynga was able to get started by relying on Facebook dividends, in 2010, Uber was able to get started by relying on mobile Internet dividends, and last year, Pinduoduo was able to get started by relying on WeChat dividends. However, the dividends of mature platforms have basically been used up, and the Golden Water Pipe must be on a new platform.

5. Conclusion

The above is my summary of how to achieve growth from three levels: start-up, explosive growth stage, and mature stage. In general, try to be frugal in the initial stage to find the three key elements that suit your product, and then gradually transition to a complete system in the mature stage.

The author of this article @周喆吾-Max compiled and published by (Qinggua Media). Please indicate the author information and source when reprinting!

Product promotion services: APP promotion services, advertising platform, Longyou Games