"Why Consumer Product Metrics Are All Terrible: A Trillion Dollar Opportunity"

"Why Consumer Product Metrics Are All Terrible: A Trillion Dollar Opportunity"

Consumer product metrics have long been a source of frustration for businesses. Whether it's low signup rates, disengaged users, or a lack of daily engagement, it seems that measuring success in the consumer product industry is a constant battle. But what if these metrics are actually telling us something valuable? And what if there is a trillion-dollar opportunity hidden within the realm of subjective search?

When it comes to consumer products, the numbers can be disheartening. A typical product may see 90% of users refuse to sign up, and of those who do sign up, over 90% become inactive over time. Mobile apps, while having better engagement metrics, often struggle with lower upfront conversion rates. However, if we shift our focus to the homepage, we would expect higher signup rates due to word-of-mouth traffic. People actively seek out these products to try them, resulting in signup rates as high as 10% or more.

Engagement and frequency are key factors in determining the success of a consumer product. Unfortunately, it's rare to see more than 10% of users coming back every day. In fact, 5% or even lower is more common. So how can businesses improve engagement and frequency? The answer lies in tying the product into someone's pre-existing behaviors rather than asking them to do something completely new. By understanding and incorporating habits and routines, businesses can create a more seamless and enjoyable user experience.

Another challenge in the consumer product industry is the lack of social connections within the service. Surprisingly, more than 50% of users often don't know anyone else using the product. This means that businesses need to fill their users' feeds with content, either from one person or through impersonal means. Instagram, for example, experienced explosive growth despite 65% of its users being disconnected from anyone else. This highlights the difficulty of creating a dynamic news feed when only a small percentage of users actively contribute content.

While the struggle to attract and retain users is evident, there is a trillion-dollar opportunity waiting to be seized in the realm of subjective search. Roughly half of search activity is subjective, meaning that people are seeking ideas, opinions, recommendations, and conversations rather than concrete facts. This content thrives on forums, long-tail blogs, social media, and review sites, rather than traditional SEO optimized websites or big media publications. Access to these subjective search platforms, such as Reddit, Twitter, HackerNews, TikTok, and Pinterest, presents a massive opportunity for businesses.