Why Consumer Product Metrics are all Terrible: Insights from Wikipedia's Co-Founder

Why Consumer Product Metrics are all Terrible: Insights from Wikipedia's Co-Founder

Consumer product metrics are often seen as a measure of success or failure for a product or service. However, when we delve deeper into these metrics, we realize that they can be quite misleading and even terrible indicators of actual user engagement and satisfaction. In this article, we will explore the reasons behind this phenomenon and also draw insights from the experiences of Wikipedia's co-founder, Jimmy Wales.

One of the common issues with consumer product metrics is the low conversion rate during the sign-up process. A typical product may experience a staggering 90% refusal rate when it comes to signing up. This can be disheartening for product owners and can make them question the effectiveness of their marketing efforts. However, it's important to understand that the upfront conversion rates may not always reflect the true potential of a product.

On the other hand, mobile apps often have better engagement metrics, but lower upfront conversion rates. This can be attributed to the fact that mobile app users are more likely to have prior knowledge or interest in the product. Word of mouth plays a significant role in driving traffic to mobile apps, resulting in higher sign-up rates. So, if we're analyzing the homepage metrics, we should expect higher sign-up rates compared to other channels.

Engagement and frequency of product usage are also critical metrics that can often be disappointing. It's not uncommon to see over 90% of users disengaging and becoming inactive over time. In fact, anything above 10% of users coming back every day is considered a success case. More often than not, the engagement rate is as low as 5% or even lower. This indicates a need to tie the product into someone's pre-existing behaviors rather than asking them to do something entirely new.

When it comes to user interaction within a product, the lack of connections can be a significant challenge. Research suggests that more than 50% of users don't know anyone else within the service they are using. This means that product owners need to ensure that the user's feed is filled with content from one person or provide personalized content. Instagram, one of the most viral products in recent history, had a staggering 65% of their users disconnected from anyone else. This highlights the difficulty in creating a healthy and dynamic news feed.

Another aspect to consider is the participation of users in creating content. The 1% rule suggests that only a small percentage of users will actively contribute by authoring content. This poses a challenge in creating a vibrant and engaging platform where users can find value. The issue of low user participation further reinforces the complexity of creating a successful product.