Product Lessons from the Early Days at Friendster by Dan Olsen
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Transcript of Product Lessons from the Early Days at Friendster by Dan Olsen
Product Lessons from the Early Days at
Dan Olsen How to Build Great Products
April 12, 2013 Copyright © 2013 Olsen SoluFons
My Background n EducaFon
n BS, Electrical Engineering, Northwestern n MS, Industrial Engineering, Virginia Tech n MBA, Stanford n Web development and UI design
n 20 years of Product Management Experience n Managed submarine design for 5 years n 5 years at Intuit, led Quicken Product Management n Led Product Management at Friendster n CEO & Cofounder of YourVersion (personalized news) n Product consultant: Box, YouSendIt, Epocrates, Chartboost
Will post slides to h[p://slideshare.net/dan_o
Copyright © 2013 Olsen SoluFons
5
Se_ng the Stage: Summer 2004
n 2002: Friendster launches n Mar 2003: Friendster opens to public n Aug 2003: MySpace launches n Oct 2003: Friendster raises $13M from Kleiner & Benchmark
n Feb 2004: Facebook launches n April 2004: Abrams replaced by interim CEO n June 2004: New CEO hired
Copyright © 2013 Olsen SoluFons
Wild West of Social Networking: Friendster’s CompeFFon in 2004
Copyright © 2013 Olsen SoluFons
Wild West of Social Networking: Friendster’s CompeFFon in 2004
Tier 1 Tier 2 MySpace Facebook
Orkut Tickle
MulFply Ryze
Hi5 Classmates
Tribe Match
LinkedIn Xanga
Blogger Copyright © 2013 Olsen SoluFons
0
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Oct03
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Uni
que
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tors
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FriendsterMySpaceHi5Orkut
• We are currently the global leader but everyone is growing • Orkut was above us in August • Hi5 is gaining ground internationally
Friendster
Orkut
MySpace
Hi5
Global Competition: Unique Visitors
U.S. Competition: Unique Visitors
US Unique Monthly Users (000)
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Jun-0
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l-04
Aug-04
1 MYSPACE.COM 2 FRIENDSTER.COM
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• Open vs. closed network Connected to Tom At most 2 degrees away
• Profile personalizaFon • Music • Groups • Chat (IM) • Blogs
ObjecFves, PrioriFes, &
Resource AllocaFon
Copyright © 2013 Olsen SoluFons
Business ObjecFves 1. Provide a Compelling Product Experience
1.a. Ensure good site upFme (availability> 99.5%) 1.b. Ensure fast site performance (page render Fme< 2 seconds) 1.c. Ensure good user saFsfacFon (>x%) 1.d. Ensure good ease of use (>y%) 1.d. Ensure strong product value proposiFon relaFve to compeFFon 1.e. Ensure good user info/content (current, accurate, detailed)
2. Grow US Ac>ve Users 2.a. Improve new user acquisiFon (> z new users/month) 2.a.1. Improve viral acquisiFon (e.g., avg # invites per user) 2.a.2. Improve non-‐viral acquisiFon (e.g., acquire users at CPA<$y)
2.b. Improve retenFon of exisFng users (retenFon rate > x%) 3. Grow Revenue
3.a. OpFmize exisFng business models (direct sell-‐through %, CPM) 3.a.1. Grow US adverFsing revenue 3.a.2. Grow internaFonal adverFsing revenue 3.b. Experiment with new business models
Copyright © 2013 Olsen SoluFons 15
Product ObjecFves & Engineering Resource AllocaFon
1 -‐ 2 3 -‐ 4 Months Months
30% 50% 1. Provide Compelling Product Experience -‐ Ensure good upFme and performance -‐ Improve Usability -‐ Enhance Value ProposiFon
60% 30% 2. Grow US AcFve Users -‐ Improve viral acquisiFon -‐ Improve yield of acquisiFon process -‐ Improve retenFon & frequency of use
10% 20% 3. Grow Revenue -‐ OpFmize exisFng ad placements -‐ Experiment with new ad vehicles -‐ Experiment with new business models
Copyright © 2013 Olsen SoluFons
Grow US AcFve Users
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Copyright © 2013 Olsen SoluFons Copyright © 2013 Olsen SoluFons
Copyright © 2013 Olsen Solutions
Product MarCom Metrics/Research
Acquire
Reactivate
Retain
Copyright © 2013 Olsen Solutions
• US mthly active uniques data • Friendster monthly signups • # of visitors to Friendster.com • Registration Data • Friends Invite Data
• US Orphans Data
• Cancellations • Emails Data • Add a Friend Data • Lapsed User Survey
Product MarCom Metrics/Research
Acquire
Reactivate
Retain
H Improve Invite & Find Friend Features
H Invitation Reminder Email
M Invitation Email Optimization
Orphan Strategy
VH Recurring newsletters
VH New Product Features
Tutorials
VH Address Book Scraper VH Improve Registration
M Extending site access to non-registered members
H Prospect Tour
20
OpFmizing Viral AcquisiFon
Copyright © 2013 Olsen SoluFons
• Which metric has highest ROI opportunity?
Friendster’s Viral Loop
Active Users
Prospective Users
Invite Click
Succeed
Invite click-through rate
Conversion rate
Don’t Click
Fail
Invites per sender
% of users sending invites
• MulFplied together, these metrics determine your viral raFo
Users
% of users who are active
= 15% = 2.3
= 85%
Registration Process
Copyright © 2013 Olsen SoluFons
The Upside PotenFal of a Metric
0
100%
0
100%
0
?
RegistraFon Process Yield
% of users sending invitaFons
Avg # of invites sent per sender
2.3
85%
15%
Max possible improvement
0.15 / 0.85 = 18% 0.85 / 0.15 = 570% ? / 2.3 = ?%
Copyright © 2013 Olsen SoluFons
Okay, so how can we improve the metric?
n How do we increase the average number of invites being sent out per sender?
n For each idea: n What’s the expected benefit? (how much will it improve the metric?)
n What’s the expected cost? (how many engineer-‐hours will it take?)
n You want to idenFfy highest ROI idea
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Aver Launching Address Book Importer…
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Aver Launching Address Book Importer…
Copyright © 2013 Olsen SoluFons 25
Aver Launching Address Book Importer…
Copyright © 2013 Olsen SoluFons 25
ReacFvaFng InacFve Users
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Personalized Emails Had Amazing User Engagement
n 627,204 sent n 615,402 delivered 98.1% delivery rate n 248,627 opened 40.4% open rate n 120,343 clicked 48.4% click rate (opened)
19.6% click rate (delivered)
Copyright © 2013 Olsen SoluFons
Personalized Emails More than Doubled ReacFvated Users
Retaining AcFve Users
Copyright © 2013 Olsen SoluFons 30
Is the site up when I want to use it?
Is the site fast enough?
Does the functionality work?
Does the functionality meet my needs?
Olsen’s Hierarchy of Web User Needs (adapted from Maslow)
Customer’s Perspective What does it mean to us?
Uptime
Page Load Time
Absence of Bugs
Feature Set
Usability & Design
Decreasing
Dissatisfaction
Increasing S
atisfaction
How easy to use is it?
Copyright © 2013 Olsen SoluFons
1. New Features Enable Members to Better Communicate & Interact
2. Improve UI & Usability
3. Better & More Dynamic Content
4. Improve New User Acquisition
1-to-many: Ability to select multiple friends
Ability to define subsets of friends
Add to existing messages
Discussion Boards
-Public -Private
Groups
-Public -Private
Instant Messaging
CSS cleanup
Header & Global Nav cleanup
Gallery UI cleanup
Profile cleanup & extensibility
Messaging UI cleanup
Photos:
Blogs/ RSS:
Prospects Tour on Friendster.com
Exposing parts of the Friendster site to non-registered users
Link to mine
Links to my favorites
More & bigger
Links to most popular Blogs
Friendster Q4 Product Roadmap
So, What Happened?
Copyright © 2013 Olsen Solutions
“Network Effects”: Not all Networks are Created Equal
Copyright © 2013 Olsen SoluFons
Network Type Broadcast CommunicaFon Social
Law Sarnoff Metcalfe Reed
Example Cable TV Fax machines Social network
Network value proporFonal to
N (linear)
N2
(squared) 2N
(exponenFal)
For Social Networks, Number of Users Is A Very Important “Feature”
~2N
~N2
~N
Copyright © 2013 Olsen SoluFons
Details: h[p://www.reed.com/dpr/locus/gfn/reedslaw.html
Reed’s Law
Users Network Value
2x 4x
3x 8x
4x 16x
5x 32x
35
Lessons Learned n When you have contenFon for resources:
n Define objecFves and prioriFes and get buy-‐in n Explicitly allocate resources
n Improving your product n High ROI opportuniFes usually exist n Define causality, track metrics, and iterate
n If problems arise, focus on lowest level first n Live site issues trump new features n Say “no” to other things unFl bleeding stops
n For social products, size of user base ma[ers
Copyright © 2013 Olsen SoluFons
QuesFons?
@danolsen h[p://linkedin.com/in/danolsen98 h[p://slideshare.net/dan_o h[p://olsensoluFons.com
Copyright © 2013 Olsen SoluFons