Simmer's Vaibhav Verma and Richard Wu Explain How To Minimize Churn On Consumer Products
These two Y Combinator founders share their experiences on how to minimize churn.
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Intuitive problems require intuitive solutions. Design your solution to a user’s problem by focusing on whether it’s intuitive or not. The less they have to think about how/if your solution solves their problem, the better.
Consider user behavior in algorithm design. Always ask yourself how changing the algorithms that drive your app will change user behavior. Will those changes empower or discourage your user?
Learn what drives user “passion” for your consumer app. Talking with users will give you insight as to what makes them “tick” when they use your app. When you identify what makes them “tick”, build around those habits to keep users coming back to your product or service.
Cultivate a user’s “ownership” of your app. The more a user feels like he or she owns the experience of using your app, that will naturally make them stick with your product or service time and time again.
“It's usually best if the problem/need is so severe that we don't need to communicate it to our users.”
“While metrics are essential, qualitative inputs are far more critical as a pre-product/market fit startup…Determining what evokes that "aha" moment is often the most crucial thing founders should be doing.”
“Founders can nurture ownership and confidence by nudging self-discovery.”
Consumer apps face unique challenges in retaining users. If your onboarding or user workflow isn’t designed well, it won’t take much for users to leave. If it’s designed properly and is intuitive, then users will stick around for a while. Y Combinator (S19) startup Simmer’s cofounders Richard Wu and Vaibhav Verma took the time to discuss their successes and failures in designing their food-first restaurant dish review. Their advice to founders in this or similar spaces is incredibly valuable.
Simmer cofounders Richard Wu (left) and Vaibhav Verma (right).
Daso: What is the right approach for any disruptor to understand their customer's needs and effectively communicate that to them?
Verma: It's usually best if the problem/need is so severe that we don't need to communicate it to our users. Most of our users intuitively understand the problem of deciding what to eat when at restaurants or when ordering delivery.
Daso: How did you down-select what information you needed to present to users for them to have an accurate idea of what dish they could potentially order?
Verma: We show them a list of dishes ordered by a combination of overall rating and # of ratings. This way, users can see what's the highest-rated and most popular at the same time.
Daso: What was your strategy through iterating over the presentation of this information to improve the odds of someone ordering food?
Verma: The primary iteration process for us has been changing our algorithm. We couldn't directly order by overall rating (one person giving a dish ten stars shouldn't make it the top plate) or by # of ratings, so we played around with the algorithm to get one that combined both well!
Daso: How can you shape user behavior through the algorithm to make sure they stick to user Simmer versus searching for their dishes on their own like before?
Verma: Typically, if users use Simmer, and it helps them decide via strong overall ratings, a reasonable number of user reviews, a beautiful picture, etc., we see them come back to the app. If the data we present for a restaurant is not as high, then we see churn.
Daso: When it comes to minimizing churn and promoting the frequency of user engagement, what inputs to do you guys optimize for to get the right outcomes?
Wu: One of the problems Simmer solves is answering the question, "what do I order at a restaurant." To do this, we have a "menu page" that is essentially a ranked list of dishes. From best to worse, each meal has ratings, reviews, and even photos. This is our "money page". When users discover this page, we see promising retention behavior from their very first session. When they don't, they typically churn.
We first look at this moment's discovery through quantitative inputs on Mixpanel. Are users reaching this page as fast a possible in their first session? If so, how long do they stay on this page? And, are they engaging, or are they bouncing? For both, why? These metrics, tracked week over week, paint a comprehensive map of where we should be focusing.
While metrics are essential, qualitative inputs are far more critical as a pre-product/market fit startup. The biggest one is if users experience an "aha" moment. Just stumbling on this page isn't enough. When I sit down with new users, I want their eyes to brighten and start sharing all the times this app could have come in handy. That means we're doing something right. For retained users, this "passion" for our product is equally important. Determining what evokes that "aha" moment is often the most crucial thing founders should be doing.
Daso: How should founders who are building consumer-facing apps think about the design of their algorithms to influence user behavior for the right outcome (increased engagement and minimized churn)?
Wu: If you consider consumer apps as sophisticated tools, then the more someone feels ownership and confidence toward your app, the more they will use it. Founders can nurture ownership and confidence by nudging self-discovery. The first step is to identify where the friction points are in the user journey to get to that "aha" moment I mention. This is when a user says any variation of "I'm confused" or "what am I supposed to be doing next". Then, design your algorithms to reduce this friction. This might look like triggering popups and tooltips right before moments of confusion. Or, personalize onboarding slides and launch an educational email campaign to prospective power users.
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