Retention is key for consumer products, particularly social platforms, as it generates growth and makes them self-perpetuating. To achieve retention, it's crucial to create engaging UX loops, refine core actions based on data analysis and strive for a minimum viable happiness that ensures customer satisfaction. Once a marketplace reaches a tipping point with high concentrations of supply and demand, it can experience rapid growth and become dominant in its market.
Takeaways
• A framework for thinking about retention consists of the core action, the retention loop, and the flywheel.
• The three levels of product growth are increasing usage, increasing retention, and making the product self-perpetuating.
• Social products need loops that keep users engaged and coming back. Bad behavior and lack of retention can result from anonymity in social products.
• Focus on a small, constrained market when growing user numbers, and determine the core action through analysis.
• The Hierarchy of Marketplaces framework consists of focus, tip the market, and dominate the market, to prioritize and focus on what matters.
• Focus on happy GMV to create customer retention and scale the marketplace more effectively.
• A marketplace tipping point occurs when growth becomes self-sustaining, requiring a focus on a narrow niche with great experiences for buyers and sellers.
• Tipping loops are crucial for marketplace growth, consisting of growth loops and happiness loops to drive supply, demand, and a positive buyer experience.
• Reach a saturation point to effectively tip a market, creating a flywheel effect where increased supply leads to improved pricing and experiences for the demand side.
• Rapid growth and success in a marketplace involve dominating the market, focusing on use case expansion, entering new markets, and reinvesting profits.
• Benchmark Capital suggests investing in underestimated markets with a long-term focus on building durable value.
• Concentrate on recognising market currents and continuous innovation to remain ahead of disruption.
