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> It's far more profitable to make a dollar each from a billion people than a thousand dollars each from a hundred. While this is true, it's also a hard to mak
by skohan 6y ago
> It's far more profitable to make a dollar each from a billion people than a thousand dollars each from a hundred.
While this is true, it's also a hard to make this argument in product discussions, especially when similar products like Facebook and Instagram also have much larger user-bases.
I can imagine the logic would probably be:
- Reddit has X users who produce Y revenue per user
- Facebook has 100*X users who produce 21*Y revenue per user
-> therefore Reddit can potentially increase revenue by a factor of 21 with its current user base!
Probably the argument should be that Reddit has X users, and not 1/100 X users because it operates in a different niche than Facebook, but this type of nuance can be very difficult to sell, especially if you have already used Facebook as a point of comparison when discussing future potential when convincing investors to give you millions of dollars.
It's very hard to quantify how much something you are not doing is contributing to user acquisition and retention. It might come out of qualitative research, but users doing an interview or a survey might not even be aware how the lack of a certain feature is contributing to their enjoyment of the site.
Probably you would also be measuring user-acquisition and retention as KPI's, and if a single feature caused a dip, the organization would certainly take notice, but if the introduction of new features gradually slows the growth rate from 8% to 6.5% over the course of months, this is much harder to attribute to a specific strategic decision.
- AnthonyMouse 6y ago> especially when similar products like Facebook and Instagram also have much larger user-bases. But this is exactly the point. You're smaller than them, so they can get away with more than you because of the network effect. If you want to grow, or even stay where you are, you have to be better than them. If you're just the same, who wants the platform which is no better and has fewer users? You never unseat the incumbent by cloning them.