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Experts From Readdle, Deviantart and Parimatch Tech Explain How to Look for Product Growth Points

When building a long-term strategy, it is worth focusing on how to provide the user with enough value, so they stay with the product longer. On December 1st, 2020, we held a free conference on product management to coincide with the international charity event "Giving Tuesday."

Parimatch Foundation organized this event to support the social activity "So I Can!". The program attracted nearly 1000 online and offline guests who donated UAH 22,000 to launch new inclusive football groups for children with disabilities. To highlight the results we chose the most exciting parts of the speakers reports for our press release.

Evgeny Plohoy, Product Manager, Readdle

When the App Store first developed, by creating a small mobile application and putting a price of $0.99 on it, you could count on someone to write about it, and you would more than recoup the development costs. The demand significantly exceeded the supply.

With the App Store's development and later the Play Market, many developers saw this as an opportunity. A few years later, the supply caught up with the demand and then went into a significant dip there were too many applications. At the same time, business margins began to decline significantly. The cost of attracting new customers and the development costs for competition on iOS were continually growing.

The demand for new products has been steadily declining. Several studies show that users have almost stopped downloading new products and are spending more and more time on just a few of them. 

In 2016, Apple added subscriptions that were previously only available to magazines. They quickly became popular and companies began to switch to a new business model massively. Developers increased business margins through recurring Revenue.

Nowadays, when you install almost any application, you see a screen that prompts you to subscribe to the service. This is the most common tactic in the market.

For mobile products, the classic AARRR funnel looks different today. Now, Acquisition is followed by Revenue people are asked to pay before they see the value of the product. Subscriptions were initially an effective tactic, but they became a standard tool and lost their effectiveness. Now, it feels like the subscription story is at this stage:

Tactics have ceased to be unique, similar to a website that used to be incredible in the 90s, but nowadays, everyone has it. ARPU (Average Revenue Per User) and CAC (Customer Acquisition Cost) collapsed and showed a perfect correlation. Low Revenue per customer means the acquisition price will also be close to zero.

But if we are building a long-term strategy, it is worth focusing not on subscriptions or on how to make much money as quickly as possible, but on how to provide the user with enough value to stay with the product longer.

This is the beginning of a significant change in mobile products. The competition is won not by the application that conducts the most experiments but by those who value users.

But value is also not as simple as it used to be. We live in a world where major players have already solved obvious and massive problems. There comes a stage when the amount of value in the product should increase. If you solve one problem, why not solve the neighboring ones instead of forcing your users to search for their own solution?

Postal services are adding calendars, taxis are adding food delivery, and streaming services are adding podcasts. If your competitor is better at solving neighboring values, users will stop switching between products. We must make sure that the person learns about the value of the product and receives it.

For example, in Documents, you can listen to music files and audiobooks with equal convenience. To do this, we added the ability to change the player's appearance on the phone screen and switch between tracks for music and the ability to rewind for a few seconds within audiobooks. When a user launches an audio track, you can show them a hint about this opportunity instead of relying on the person to guess it.

To briefly summarize:

  • Competition for the user is growing, and new monetization tactics are quickly copied, even without a competitive advantage
  • It is essential to solve customer problems effectively and, if possible, add value to them by solving new problems (super apps)
  • Focus on getting every new user to find value in your product, not selling them more products at a rapid rate (value nurturing)
  • If you help the user solve his or her problem, profits will soon follow.
  • Whenever possible, reduce the number of steps or the time it takes a new user to get value from your product (time to value)

Anastasia Burdyko, Growth Team Lead at Parimatch Tech

We have conducted over 200 product-related experiments within a year. This is the most effective way to find growth points for a product. In general, we use two frameworks for these purposes. The first one is AARRR Funnel: 

  • Acquisition customer attraction
  • Activation
  • Retention
  • Referral recommendation
  • Revenue income

The framework contains several user interaction stages with the product, starting from the first meeting and ending with returns and recommendations. The point is to divide the user's life cycle with the product into AARRR stages to separate the functionality and see which metrics relate to which functionality. Then it would be best if you found the most "sagging" moments (at what stage of the funnel users are lost) these moments can become a crucial point of growth.

Some often criticize AARRR for encouraging the framework to work in tactical ways. For example, an urgent action provoked an increase in the audience, but afterward, it is unclear. Realizing this shortcoming, Growth specialists from Reforge proposed their framework called Growth loops. How is it different?

Reforge concluded that product growth should not be viewed as a funnel but as a cycle. They proposed a framework where everything starts from one point of entry into the product (Input no matter if the user is new or returning), which logically leads to the user's action in the product (Action), after which a result is obtained that precedes the return or attraction of new users (Output). 

When you have decided on a specific goal, it's time to experiment. For a simple explanation of experiments, the HADI framework is most often used - hypothesis, action, data, conclusions. But when you do this regularly, it complements your processes. For example, we have documentation stages, prioritization, the design of an experiment, and sharing the entire company's output.

For the experiments themselves, we use A/B tests, UX tests, and MVP creation. The important thing is that they must be fast. Some Growth teams will not experiment if the implementation (in this case: design, development, operations, and analytics) takes over five days.

We then have the stages of execution and control, analysis and reflection. The latter is very important. Not all experiments work out well, and that's a good thing. You need to sit down and think about why this happened and what I could do better. Also, we have developed many rules and principles. Here's what we recommend:

  • Set goals. They should be responsible not only for the growth of metrics but also for the number of experiments. For example, tests 1,000 hypotheses per hour an incredible number.
  • Keep the focus. Set a specific time for a specific metric. For example, these three months, we have been working on conversion to registration. Strictly adhere to the plan.
  • Simplify. The faster you get feedback from the user, the faster you will earn and save.
  • Improve the metrics, not the name of the functionality.

Let me give you an example. Users of our platform have complained that they find it difficult to understand the password requirements. At first glance, there was no room for change. However, we redesigned the structure and yielded an amazing result - the conversion rate to registration increased by 64%.

Andrey Umansky, Product Manager, Deviantart

For 90% of existing products, the backlog is a Pandora's box. If you look at it, you will see the crooked User Story made ten years ago. The backlog is filled with founders, marketers, sales managers, and support managers there are many sources.

This vignette from the backlog and the attempts to prioritize it boil down to one thing we always follow the path of the least resistance. Stories show this. 2013 Snapchat launches Stories, followed by Instagram three years later. In a short time, the second service surpassed its major competitor in terms of visibility. After that, all other platforms LinkedIn, Skype and others start copying it. It turns out badly for everyone.

In conclusion the path of the least resistance almost always does not work. There is no need to copy the most apparent solution. Let's change our approach and pay attention to the things that don't immediately catch our eye.

So, how to do it? Jobs to be done comes to our rescue with the concept of "Cool framework" that users don't buy your product, they "hire" it to complete tasks. Users don't buy a drill, they buy a hole in the wall.

There are two types of followers here. The former advocate for work as an action the same hole in the wall. The latter are more inclined to work as a process. They question why do we need a hole in the wall at all? If you consider another example a lawnmower the company will make better versions of the product in the first approach. And in the second, he will switch to a completely different product, for example, a dwarf lawn. Where is the copying process here?

There are three types of competitors: 

  • Direct PlayStation and Xbox
  • Secondary. Zoom and Uber we connect to a meeting or go to it. Different tools, the solution is the same
  • Indirect. This is about different jobs, but with conflicting results. Burgers or fitness. Breakfast cereal or no breakfast at all. This is the very heart of it all the zone where you can and should make the right decisions

We are using a tool called Radar. We divide our product into four zones. Here's how it works:

DeviantArt has two types of audiences artists and art consumers. Therefore, we consider two types of competitors for artists and consumers, respectively. There are products that we track to adopt cool, narrow solutions. For example, YouTube has awesome onboarding, and the BetterMe fitness app has exceptional daily challenges.

Luting is the area I follow the most. These services never compete with us but compete for the result the time spent. You either draw pictures or sit on Pornhub. Therefore, I regularly follow all these services and try to understand how they interact with the audience. This is the best way to adopt features.

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