Summaries Data Science and Analytics Maximizing Product Success: Tips from Suhail Doshi and Mixpanel

This is a summary of a YouTube video "Suhail Doshi - How to Measure Your Product" by Y Combinator!

4.9 (18 votes)

Measuring user behavior and focusing on key metrics, engagement, and retention are crucial for building a successful product, and startups can benefit from Mixpanel's top-down approach to analytics and freemium plan.

• 📈
  00:00

  Measuring user behavior is crucial for growth and building a successful product, and Mixpanel offers a top-down approach to analytics with a freemium plan for startups.
• 📈
  05:57

  Simplifying and focusing on three to five key metrics can be more effective for decision-making in large companies.
• 🚀
  11:22

  Mixpanel transformed metrics into actions that speak louder than pages by measuring engagement instead of pageviews, prioritizing customer needs, and conducting A/B tests to resonate with consumers.
• 🔍
  17:33

  Airbnb simplified their initial user experience with a basic search function, speed is important, and iterating on the process is a never-ending task.
• 🦈
  23:11

  Startups should not ignore the "shark fin effect" and focus on retention to avoid losing users and hurting their company.
• 💰
  28:22

  High monthly churn rates can lead to revenue loss, so it's crucial to focus on retention to avoid long-term negative impact on growth.
• 📈
  33:03

  Choose one Northstar metric for your company, commit to it for at least six months, and make it clear for your team to focus on.
• 📈
  37:40

  Experimentation is key to finding the right balance between simplicity and complexity in user experience and achieving higher conversion rates.

Key insights

User Experience and Iteration

• 💡 Focusing on a few key metrics that guide the team is more effective than tracking a long list of sub metrics that are difficult to keep track of.
• 🚀 Making the first step easy for users is crucial for getting them started with your product, even if you have many cool features.
• 💡 The importance of getting step one right in product development: "You don't even have a chance at any of the subsequent steps."
• 🏠 Airbnb simplified their initial user experience by focusing on the most important steps, despite having a complex booking process.
• 💡 Figuring out the right thing for a product is harder than building it: "The thing that's really hard is like figuring out that that's the right thing that's really hard that takes like they probably change that you know 50 times before they figure it out."
• 💡 Speed is a crucial factor in measuring the success of a product, as it can determine how quickly users can get started and how complicated the experience is.
• 💡 Iterating on user experience is a never-ending process and having someone responsible for it is critical for the success of the product.
• 💬 Talking to customers is more valuable than looking at data points: "You will never get as much information and insight in building your own intuition than just talking to customers."

Measuring Product Success

• 💰 Suhail Doshi's company, Mixpanel, has around 7,000 paying customers and is closing in on around 100 million dollars in annual recurring revenues.
• 💡 The most important thing for a product is whether people are coming back and using it.
• 💡 Measuring growth of a product involves tracking basic user actions, valuable actions, retention, and referrals.
• 💡 Suhail Doshi emphasizes the importance of measurement and iteration in product development, stating that "after a lot of work. A lot of hard work a lot of iteration a lot of talking to customers a lot of measurement" is what led to success.

Importance of Retention and Churn Reduction

• 📉 "There's a really strong correlation with daily use and rate of churn like rate of like people like stop not no longer paying for the product." - Suhail Doshi emphasizes the importance of measuring daily active users for reducing churn in a product.
• 💀 Monthly churn can be the "single cause of death" for a product, and it's important to focus on retention to avoid this.

Detailed summary

• 📈
  00:00

  Measuring user behavior is crucial for growth and building a successful product, and Mixpanel offers a top-down approach to analytics with a freemium plan for startups.

  • Suhail from Mixpanel talks about measuring your product, which is crucial for growth and building something people will use.
  • Mixpanel is a company that helps measure user behavior inside a product and has grown to 300 employees, raised a lot of money, and has around 7,000 paying customers with annual recurring revenues of around $100 million.
  • The speaker suggests taking a top-down approach to thinking about analytics and metrics, focusing on the problem to be solved rather than complex analysis, and mentions catering to startups with a freemium plan.
  • When starting a company, it's important to ensure that people understand and can easily use your product, and that they continue to come back and use it.
  • The basics of growth include measuring user engagement, retention, and referral rates, which are crucial for achieving growth.
• 📈
  05:57

  Simplifying and focusing on three to five key metrics can be more effective for decision-making in large companies.

  • Large companies often overcomplicate the number of things they measure and track, causing decision-making paralysis, but simplifying and focusing on three to five key metrics can be more effective.
  • Metrics should guide and help monitor the team, and with a simple formula, it is possible to assess anything going wrong in the company.
  • Optimizing the steps of understanding, getting started, and finding value in a product is a never-ending process, even for large companies like Airbnb, and measuring and assessing these steps can help identify areas for improvement.
  • Having a bad landing page can cause users to leave immediately, so it's important to remember that your enemy is the back button.
  • The speaker made grammatical mistakes and had a misguided idea for a company tagline based on the aesthetics of their graphs.
• 🚀
  11:22

  Mixpanel transformed metrics into actions that speak louder than pages by measuring engagement instead of pageviews, prioritizing customer needs, and conducting A/B tests to resonate with consumers.

  • The speaker made mistakes in targeting and designing the landing page, but after hard work and iteration, they transformed metrics into actions that speak louder than pages.
  • The company differentiated itself from Google Analytics by measuring engagement instead of pageviews, which resonated with customers and was reflected in their tagline and website copy.
  • To determine if your product is valuable, look at the number of people who sign up and click on important links such as pricing pages.
  • Conduct A/B tests to find out what resonates with consumers and make the first step easy to understand to increase the chances of success in building a company.
  • Having a forgot password feature is useless if a small percentage of people are not even bothering to get started with the product.
  • Prioritizing customer needs is crucial, as demonstrated by Mixpanel's lack of password reset requests, and easy-to-use products like Google's search engine.
• 🔍
  17:33

  Airbnb simplified their initial user experience with a basic search function, speed is important, and iterating on the process is a never-ending task.

  • Airbnb simplified their initial user experience by creating a basic search function to help users get started quickly and easily.
  • Finding the right solution for a company takes a lot of work and requires grinding hard to figure out the optimal thing.
  • Measuring the funnel for the entire initial user experience is the simple answer to determine how many people go from a landing page to doing a valuable thing, even in situations like games with 20 or 30 steps.
  • Speed is important in user experience, and companies should focus on making their processes as fast and simple as possible.
  • Don't optimize for fraud and spam problems until you have them, and be careful with email and text confirmations as they have a high drop-off rate and can lead to losing users.
  • Iterating on the initial user experience is a never-ending process, having someone responsible for it is critical, and letting users into the product is always better if possible.
• 🦈
  23:11

  Startups should not ignore the "shark fin effect" and focus on retention to avoid losing users and hurting their company.

  • The "shark fin effect" is a metric that is often ignored by startups and can lead to their downfall, as seen in the graph of companies that grew virally and then died.
  • If an app goes viral too early without considering retention, it can become problematic and hurt companies as the rate of losing users becomes too high to acquire new ones.
  • Retention is important and sending activation campaigns to lost users is usually not effective, as seen in the example of LivingSocial's shark fin effect.
  • LivingSocial had to pivot their entire company to compete with Groupon due to their app's lack of retention, and it's important to track the percentage of new users who return after a longer period of time to avoid losing users.
  • Monthly active users (MAU) is becoming a meaningless metric and daily active users (DAU) is a better metric to measure user engagement and reduce churn rate.
• 💰
  28:22

  High monthly churn rates can lead to revenue loss, so it's crucial to focus on retention to avoid long-term negative impact on growth.

  • Companies offer subscription services, usually charged monthly, and revenue churn is important to measure.
  • High monthly churn rates can lead to losing a significant amount of revenue, making it crucial to focus on retention to avoid a long-term negative impact on growth.
  • Flat growth can occur in the early stages of a company, but it can be fixed by acquiring users and experimenting with product and pricing.
  • To measure metrics when you have less than 50 users, talk to your users and get feedback.
  • The speaker created a simple UI test by asking 11 people for feedback on a horizontal funnel design, which resulted in a successful decision to implement it.
• 📈
  33:03

  Choose one Northstar metric for your company, commit to it for at least six months, and make it clear for your team to focus on.

  • Talking to customers is more valuable than looking at data points and it's critical to write down feedback to build intuition and make employees feel like they're on the journey.
  • Choose one Northstar metric for your company to simplify things and make it clear for your team.
  • Choose one metric and commit to it for at least six months, print it out and put it all around the office, and don't focus on too many numbers.
  • Read about the next feature fallacy by Andrew Chen and follow people who can give you more ideas for advanced topics.
  • The TLDR is not possible to make as the notes provided do not contain any coherent information or ideas.
• 📈
  37:40

  Experimentation is key to finding the right balance between simplicity and complexity in user experience and achieving higher conversion rates.

  • Conversion rates for the five steps of visiting, signing up, and using a product vary depending on the business, and it's best to seek out benchmarks from similar industries and ask friends for their conversion rates.
  • Companies need to find a guiding principle and experiment to determine the minimum number of things needed to get someone started in order to balance simplicity and complexity in their user experience.
  • Experimentation is key to finding out what works for users, as seen in the case of Mixpanel where adding videos to previously empty tabs resulted in higher conversion rates.
  • Metrics like user retention and dollar churn are not directly linked, and can be used for hardware startups with a subscription model, and it's important to talk to users to figure out who your customers are and what features to prioritize.
  • Building a "forgot password" feature becomes necessary when the number of requests for it increases and manually doing the process becomes annoying, as it affects user retention.
  • To measure product market fit, focus on quantitative metrics such as retention rates and frequent use, and aim to beat industry benchmarks.

Q&A

• Why is measuring user behavior important for building a successful product?

  Measuring user behavior is crucial for growth and building something people will use.

• What is Mixpanel and what do they do?

  Mixpanel is a company that helps measure user behavior inside a product and offers a freemium plan.

• What are the key metrics to focus on for achieving growth?

  The key metrics to focus on for achieving growth are user engagement, retention, and referral rates.

• How can simplifying the number of metrics be more effective?

  Simplifying the number of metrics to three to five key ones can be more effective in decision-making and monitoring the team.

• Why is it important to optimize the initial user experience?

  Optimizing the initial user experience is important to ensure that people understand and can easily use the product, and continue to come back and use it.