Product Management Weekly - Issue #9
This week’s write-up focuses on new social monetization models, NPS scoring across industries, Iceberg Canvas, Community/Network competitive advantage, UX benchmarking and more!
Six Ways New Social Companies Will Monetize
Anne writes on a16z on how new social companies are experimenting with new monetization models and are pivoting from the traditional ad-driven model’s which have been dominant across Facebook, Instagram, Snapchat, Google and Twitter and other previously across the last decade.
Some key highlights across various monetization model’s (from the article) are listed below:
VIP membership subscriptions for exclusive content
From a purely financial perspective one should adopt a paywall if one can convert more than 0.0005% of viewers to subscribers
Commerce: Platforms that help creators sell products
Examples include: Instagram (Shops), Tiktok (Shopify), PopShop/Whatnot/Huddle/LitLive (livestream shopping)
Virtual live experiences
Similar to subscription models, or ticketed entry such models have gathered more momentum post-covid
Such a models rely on network effect of the influencer
Example include: Moment House, Headliner
Interest-based paid communities
Allows users to engage with people of similar interest and challenges.
Mostly membership driven, and membership can vary from $50 to a few hundreds $$$ per month
Digital goods and in-app currencies
Currently in its early stages of development, and more common in gaming industry for now; examples include options for users to be able to “tip” streamers with digital currency’s
Gucci has recently released its limited edition collection for the fashion game
Other companies experimenting with the idea include: Tinder, Bumble, Coffee meets Bagel
Tipping, donations, and microtransactions
Livestream tipping has become a $10B industry in China
Examples include: Taobao Live, Douyin, Kuaishou, Twitch, Clash
Benchmark Report: What is a Good Net Promoter Score?
If you are curious about how NPS varies across industries, the present article by Retenly is a great read. The article suggests how by using a relative methodology as compared to an absolute one can enable us to gauge and understand our the NPS metric better.
Some other highlights from the article:
The average NPS for auto dealers lies in the range of 39 with the lowest having a value of 20 (Temkin study)
The average NPS for Internet Service Providers lies in the range of 0, with the lowest being -16 and the highest 19
Average NPS for Education industry is 71
Average NPS for Ecommerce and Digital Marketing Agencies lies in low 60s
Enterprise software and Construction companies have an average NPS in high 40s
SaaS companies have an average NPS ~ 30
Healthcare industry has an average NPS ~27
Tesla has an NPS of 96
Instead of asking “What is a good Net Promoter Score?”, focus on understanding what drives the score and how to improve it day in day out, month in month out to produce long-term customer success.
Letterboxd and Niche Social Monetization
What is Letterboxd?
Track films you’ve watched. Save those you want to see. Tell your friends what’s good.
Rob writes about the various pricing plans from Letterboxd, and how they are use a generous free plan, and build on top of it with their paid plans which are used by their thriving niche community. Letterboxd paid plans include - Pro and Patron, which give users more customization and ad free capabilities. With a price target of $1.58 per month for
pro and $4.08 for
patron, these plans are a low cost way for power users to take their experience to the next level. Rob mentions on how such products remind him of various niche communities hiding in the plain sight on reddit.
The Iceberg Canvas
The Iceberg framework is a design framework for re-evaluating product value propositions.
Below the iceberg can be used as a plug-in tool for enhancing design tools and methods: customer journeys, service blueprints, design research, etc.
When Community Becomes Your Competitive Advantage
HBR article on how unlocking the community can help provide an extraordinary competitive advantage and benefit your business model. If we look at clubhouse today, it is one of the perfect examples of a product thriving from its community advantage.
Some key highlights:
Community enables organic growth, reduces customer acquisition costs, serves to preserve retention and longer lifetime value, and has a cumulative effect thereby resulting in lower cost margins
In a recent survey 80% startup founders have reported that building a community is important to their model
Harley Davidson has invested in over 1,400 local chapters across the world for enthusiasts to come together and discuss their bikes
Fitbit has a community of over more than 25 million members who discuss and share their exercise regime
HITRECORD has brought over 750,000 artists, writers and flimmakers to collaborate on productions
Other examples include communities like Instagram, Tiktok etc which are thriving based on their community effect
The Hidden World of Pricing: Uber, Trulia, Etsy, Superhuman & More
Pricing is often an afterthought in many startups, even though pricing is a blind-spot, its very important to understand early on why and how much customers are willing to pay for the product in the longer run. Asking such questions also enables us figure out the gaps early on, and not waste resources on unnecessary things. Often times just asking the customers “What do you think is an acceptable price for this innovation” might help us understand and develop the pricing model. Superhuman, adopted this strategy early on which allowed them to clock their price at $30. The article also talks about what to do during extreme swing conditions ( for example Covid-19) and to focus on
land and expand strategy to gain more userbase. Similarly when one is losing demand, lowering the price might be wrong thing to do instead one should think about non-pricing concessions for example: giving more product away, have flexible payment terms, work on a risk/reward program etc. The article goes into case studies from Uber, Etsy, Amazon and Evernote.
The article is also available on audio incase you are interested here
7 Steps to Benchmark Your Product’s UX
The article describes a 7-step process for creating a benchmarking process for UX designs. The article describes in detail some of the metrics you might want to consider to track (based on Google HEART framework). These include:
Satisfaction rating (Happiness)
Ease-of-use rating (Happiness)
Average time on task (Engagement)
Feature Usage (Engagement)
Conversion rate (Engagement)
New accounts/visitors (Adoption)
Conversion rate (Adoption)
Returning users (Retention)
Renewal rate (Retention)
Error count (Task effectiveness and efficiency)
Success rate (Task effectiveness and efficiency)
Time on task (Task effectiveness and efficiency)
A complete guide to user journey mapping
Geordie Kaytes writes on Appcues about the various forms of user journey mapping processes, and describes how some companies (eg. Airtable etc) might use these mappings, to identify and create a better product experience. The different user journey mapping discussed in the article include:
Day in life maps
Customer state maps
Future state maps
Product Framework: Storytelling for Product Managers
Building Product Career
The article talks about why story telling is important, and how as a PM it would benefit your strategy and help you achieve greater buy-in. The article going into details and explains how TED presentors use story-telling to inspire their audience. Some ideas include:
Immersing your audience in a story
Telling a personal story
Bringing characters to life
Showing the audience, rather than just telling
Building upto a S.T.A.R. moment
Ending with a positive takeaway
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