What Happened to Yahoo and Four Questions Towards Understanding User Adoption of Your Product

What Happened to Yahoo and Four Questions Towards Understanding User Adoption of Your Product

In the early days of the internet, Yahoo was a dominant force. It had the potential to become what Google is today. However, Yahoo made some critical mistakes that led to its downfall. One of the main issues was Yahoo's ambivalence about being a technology company. Unlike Google, Yahoo saw itself more as a media company than a technology company. This led to a lack of focus and a failure to fully capitalize on the value of its traffic.

Yahoo was the beneficiary of a de facto Ponzi scheme. Investors were excited about the internet and saw Yahoo's revenue growth as a sign of its potential. Startups used the money they received from investors to buy ads on Yahoo, which further fueled Yahoo's revenue growth. This created a cycle where investors believed in the internet's potential and continued to invest in startups, leading to more ad revenue for Yahoo. The focus was on driving traffic and selling banner ads, rather than on search.

On the other hand, Google saw the potential in search and focused on selling ads based on search results. They didn't have the distraction of trying to be a media company. They understood that as a technology company, their main source of revenue would come from selling ads. This clarity of focus allowed Google to develop a strong identity as a technology company.

Another problem that plagued Yahoo was its approach to programming. They treated programming as a commodity, with product managers and designers controlling the user-facing software. The role of programmers was simply to translate the work of product managers and designers into code. This led to a decline in the quality of programmers at Yahoo, which is a death spiral for any technology company. Good programmers want to work with other good programmers, and once the quality starts to decline, it becomes difficult to recover.

In contrast, Google had a hacker-centric culture from the beginning. They understood the importance of attracting and retaining great programmers. This allowed them to build a strong team and create innovative products. Great programmers are attracted to companies that have a hacker-centric culture, where they have the freedom to explore and create.

Now, let's shift our focus to understanding user adoption of a product. One way to gain insights is by looking at bouncebacks. Bouncebacks are users who initially tried a product, found it not useful, but then came back to give it another try and got hooked. By studying their experiences, we can gain valuable insights into what caused them to come back and become active users.

There are four questions we can ask bouncebacks to understand their journey:

1. What prompted you to sign up and try out our product in the first place?
2. What did not meet your expectations or what was hard to figure out?
3. Why did you come back to give the product another try?
4. What worked the second time that got you using it more frequently?

By analyzing the answers to these questions, we can identify the reasons why people were initially interested in our product, what the product did not deliver upon first experience, the messages that brought them back, and the actions they took to become active users.

Using this information, we can revamp our messaging to focus more on the messages that brought people back and got them engaged. We can also update our product and onboarding process to simplify the actions that users took the second time to get fully engaged.

For example, Twitter revised its onboarding process to focus more on following and finding the right people, instead of talking about tweeting and broadcasting. This led to significant increases in user activation after sign-up. By understanding the reasons why users bounced back and what worked the second time, Twitter was able to make targeted improvements to its product and messaging.

In conclusion, the downfall of Yahoo can be attributed to its ambivalence about being a technology company and its failure to attract and retain top-notch programmers. On the other hand, Google's success can be attributed to its clear focus on search and its hacker-centric culture. When it comes to understanding user adoption of a product, studying bouncebacks and asking the right questions can provide valuable insights for improving product messaging and user experience. By focusing on creating a strong base of core users who deeply use the product, companies can set themselves up for long-term success.