The Big Lessons From History: Why Consumer Product Metrics Are All Terrible

The Big Lessons From History: Why Consumer Product Metrics Are All Terrible

History has always been a valuable tool for learning and gaining insights. It allows us to understand the mistakes and successes of the past, and apply them to the present and future. However, there are different types of history that we can learn from. While specific events can provide valuable lessons, it is the broad behaviors and patterns that tend to be more useful for shaping our strategies and decisions.

When it comes to consumer product metrics, it's no secret that they often fall short of expectations. Take, for example, the conversion rates of typical products. It's not uncommon to see 90% of potential users refuse to sign up. And even among those who do sign up, over 90% of them eventually become inactive and disengage over time. These numbers can be disheartening for product developers and marketers.

Mobile apps, on the other hand, may have better engagement metrics but struggle with low upfront conversion rates. This is because mobile app traffic is usually driven by word of mouth, resulting in higher sign-up rates. However, a significant portion of these users, often over 90%, are not engaged on a daily basis. They either churn or only use the app sporadically. In fact, anything above 10% of daily active users can be considered a success.

To improve engagement and frequency, it is crucial to tie the product into someone's pre-existing behaviors. Instead of asking users to do something completely new, find a way to integrate your product seamlessly into their existing routines. This can increase the chances of them becoming regular users and having a positive experience.

Another challenge in creating a healthy and dynamic news feed is the fact that a large percentage of users don't know anyone else on the platform. This means that the feed needs to be filled with content from one person or impersonal content. Instagram, for example, had 65% of its users disconnected from anyone else at one point in its history. This highlights the difficulty of creating a vibrant community when only a small percentage of users actively contribute content.

Now, let's shift our focus to the big lessons from history. One of the most significant lessons is the importance of managing short-term problems to enjoy long-term growth. This requires a balance between optimism and pessimism. It's not about being exclusively one or the other, but rather recognizing when each mindset is appropriate. Successful long-term endeavors often involve reconciling the short-term challenges with the belief in a brighter future.

Furthermore, history teaches us that the long run is usually good, while the short run is often challenging. Managing these conflicting realities requires effort and a deep understanding of how to navigate them effectively. It's about recognizing that progress takes time and being patient during the difficult moments.

In addition, history reminds us that everyone sees the world through their own lens, influenced by their experiences and social circles. This can lead to biases and a reluctance to accept ideas that don't align with our preconceived notions. It's essential to remain open-minded and challenge our own beliefs to avoid falling into the trap of confirmation bias.

Moreover, incentives play a significant role in shaping people's beliefs and actions. Smart individuals can embrace and defend ideas that range from goofy to disastrous simply because of the incentives they face. Understanding this aspect of human behavior allows us to question and analyze the motivations behind certain actions or decisions.

When it comes to big events and their causes, history teaches us that they are rarely the result of a single factor. The world is complex, and important events are usually the culmination of various interconnected factors. Blaming or admiring a single person or group oversimplifies the reality. To truly understand the significance of an event, we must delve into its long roots and recognize the chain of events that led to its occurrence.

Furthermore, history warns us about the risks that catch us off guard. The most impactful risks are often the ones that no one sees coming, leaving us unprepared and vulnerable. These surprises can shake our beliefs and leave us feeling paranoid and pessimistic. It is crucial to remain vigilant and consider the risks that may not be in the spotlight but have the potential to cause significant damage.

In conclusion, both consumer product metrics and the lessons from history offer valuable insights for decision-making and strategy development. To improve product metrics, it is important to focus on engagement and tie the product into users' existing behaviors. When it comes to history, the broader lessons and patterns tend to be more useful than specific events. Balancing optimism and pessimism, understanding biases and incentives, and recognizing the complexity of causality are all essential aspects of learning from history. By applying these lessons, we can make more informed decisions and navigate the challenges of the present and future.

Actionable advice:

1. Focus on engagement by integrating your product into users' existing behaviors.
2. Challenge your own beliefs and biases to avoid falling into confirmation bias.
3. Consider the long roots and interconnected factors behind events to gain a deeper understanding of their significance.