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Sarah Tavel

General Partner at Benchmark

Benchmark

🎯 Product Strategy (1)📈 Growth & Metrics (1)

Key Takeaways

  • 1.Identify your product's 'Core Action'—the specific user behavior that correlates with retention, not just app opens.
  • 2.Great consumer products must get better the more you use them (accruing benefits) and harder to leave (mounting loss).
  • 3.For marketplaces, not all GMV is equal; focus on 'Happy GMV' where customer satisfaction ensures retention.
  • 4.Start by boiling a thimble, not the ocean: constrain your marketplace initially (geography or category) to achieve liquidity.
  • 5.Think of markets as currents (momentum/timing), not just bodies of water (size).
  • 6.Anonymity in social products often fails because it prevents the accumulation of social capital and mounting loss.

Methodologies(2)

🎯 Product Strategy

A three-level framework to gauge the quality of growth. It starts with completing the core action, moves to retention through accruing benefits, and culminates in virtuous loops where usage fuels further growth.

Core Principles

  • 1.Level 1: Grow engaged users who complete the 'Core Action' (e.g., Pinning), not just visitors.
  • 2.Level 2: Retain users by ensuring the product gets better with use (Accruing Benefits) and creates 'Mounting Loss' if they leave.
  • 3.Level 3: Self-perpetuating loops where user activity (kinetic energy) re-engages others or improves the ecosystem.
  • +1 more...

"If a user isn't doing this [core action], they're not really a user to the product. That's why the MAU thing doesn't really mean anything."

#hierarchy#engagement#strategy
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📈 Growth & Metrics

A roadmap for marketplace domination. It begins with extreme focus to prove value ('Happy GMV'), moves to tipping the market via loops, and ends with dominating the market to achieve profitability.

Core Principles

  • 1.Level 1: Focus on the 'Thimble'. Constrain the market (geo/category) to maximize 'Happy GMV' (retention-led transactions).
  • 2.Level 2: Tip the Market. Reach a saturation point where growth becomes organic via tipping loops (e.g., supply brings demand).
  • 3.Level 3: Dominate. Become #1 by a wide margin to capture the economic rents and withstand competition.
  • +1 more...

"Not all GMV is created equal... It's a lot easier to get to $1M of GMV when you're skimming the cream on this big ocean of a market, than to be very, very focused on a smaller market."

#hierarchy#marketplaces#growth
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