The Power of Lists: From Discovery Platforms to Product Market Fit

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Glasp

Sep 05, 20235 min read

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The Power of Lists: From Discovery Platforms to Product Market Fit

Introduction:

In today's digital age, where information overload is a common challenge, lists have emerged as a popular alternative to traditional search engines. As Benedict Evans famously said, "Lists are the new search." This statement holds true in various contexts, from the world of books to the realm of music streaming services. In this article, we will explore the significance of lists, their role in curation and discovery, and their connection to product market fit.

The Importance of Curation and Discovery Platforms:

When it comes to e-commerce giants like Amazon, their relative weakness lies in curation, discovery, and recommendation. While their logistics system is top-notch, a good bookshop or any shop, for that matter, is primarily a discovery platform. It's about the tables, not just the shelves. These tables represent curated lists that capture the attention of consumers and guide them towards their desired products. However, the challenge lies in achieving scalability with curated lists, as they require constant curation to remain relevant and useful.

The Rise and Fall of Yahoo's Hierarchical Directory:

A prime example of the challenges faced by curated lists is Yahoo's hierarchical directory, which collapsed under its own weight. With over 3.2 million entries, it became too cumbersome to browse, necessitating the need for search engines like Google. This begs the question: Can search engines alone solve the issue of scalability for curated lists? While search engines are efficient at retrieving specific information, they often fall short in providing a curated experience. The solution lies in striking a balance between curation and search.

The Appeal of Flipboard and Domain-Based Lists:

Flipboard's manually curated directory of sites to follow offers an appealing alternative to overwhelming search engines. It serves as a list of lists, focusing on specific domains and avoiding the trap of trying to encompass everything. This approach mitigates the issue of unmanageable size and offers a more curated and personalized experience for users. Domain-based lists hold great potential in enhancing the discovery process, providing users with targeted recommendations based on their interests.

The Role of Curated Playlists in Music Streaming:

Apple Music and Spotify recognize the limitations of offering an extensive library of 30 million tracks without any curation. They understand that a search engine alone cannot provide a satisfactory user experience. Thus, they employ a combination of human curation and algorithmic matching to create playlists tailored to users' preferences. This hybrid approach ensures that the lists are made by hand, while the machine facilitates the process of finding and recommending them. This model highlights the need for a balance between automation and human curation.

The Impact of E-commerce on Retail:

As e-commerce continues to mature, it raises questions about the future of retail beyond the big aggregators like Amazon. The removal of geographic constraints and the ability to showcase every SKU can lead to a spectrum of large and small retail opportunities. This shift may make it easier for smaller retailers to compete with industry giants by offering niche products and curated lists that cater to specific customer preferences. The key lies in finding the right balance between extensive inventory and personalized curation.

Quantitative Product Market Fit and Cohort Retention:

Product market fit (PMF) is a crucial milestone for any product, indicating that it is ready to shift focus from product improvement to scalable acquisition channels. While Net Promoter Score (NPS) is often used as a metric for PMF, it may not always provide an accurate representation of a product's success. Cohort retention rate emerges as a more reliable metric for determining PMF. A high cohort retention rate signifies that users love the product and are likely to recommend it to others.

The Importance of Cohort Retention Charts:

Tracking cohort retention rates through a cohort retention "triangle" chart is a valuable tool for measuring PMF. As newer cohorts exhibit high retention rates, it indicates that the product is continuously improving and resonating with users. Different products have varying points of PMF, making it crucial to benchmark retention rates against comparable products that have achieved significant growth. Consumer products typically aim for a 25% floor, while B2B SaaS products strive for a 70% floor.

Actionable Advice:

  • 1. Embrace the power of curated lists: Consider incorporating lists as a discovery platform for your products or services. Curated lists can help customers navigate through overwhelming options and find what they truly desire.
  • 2. Strive for a balance between curation and search: While search engines are efficient for retrieval, they often lack the personal touch of curation. Explore ways to combine human curation with search algorithms to provide a curated experience while maintaining scalability.
  • 3. Prioritize cohort retention: Focus on improving your product to attain high cohort retention rates. Actively measure and track these rates using cohort retention charts to gauge your progress towards achieving PMF. Good retention not only amplifies acquisition efforts but also drives word-of-mouth recommendations.

Conclusion:

Lists have emerged as a powerful tool in the digital landscape, offering curated experiences and aiding in the discovery of products and services. From bookshops to music streaming platforms, curated lists provide a human touch that search engines alone cannot replicate. Balancing curation with search algorithms is crucial for achieving scalability and ensuring a personalized experience. Additionally, cohort retention rates serve as a reliable metric for determining product market fit, indicating that a product is ready to transition towards scalable acquisition channels. By embracing the power of curated lists and prioritizing cohort retention, businesses can enhance their offerings and drive growth in the ever-evolving digital marketplace.

Resource:

  1. "Lists are the new search — Benedict Evans", https://www.ben-evans.com/benedictevans/2016/1/31/lists-are-the-new-search (Glasp)
  2. "The best metric for determining quantitative product market fit — Growth Engineering Blog by Jeff Chang", https://www.growthengblog.com/blog/the-best-metric-for-determining-quantitative-product-market-fit (Glasp)

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