Phil Carter
speaker
228 appearances
1 recordings
1 series
first heard Sep 2024
last heard Sep 2024
Phil Carter’s voice in public audio — every appearance, attributed to the second.
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Appearances
Similarly, even if I have a unique and differentiated value promise, but if it's not enduring, then I'm going to have very high subscriber turn rates. And this is something that I saw a lot in quantified self apps early on, whether you're a fitness tracker or a sleep app or nutrition, whatever the case may be.
Oftentimes, within your first month or two of using one of these products, and I've used many of them, right? I've got an Apple Watch. I've got an Oura Ring. I love these products. The very best ones have done a great job overcoming this challenge. But in many cases, after I see a month or two of my data, I kind of know, okay, these are the things that lead to better sleep.
And these are the things that lead to better fitness metrics like HRV or resting heart rate or whatever the case may be. So the value diminishes over time. Which means my likelihood to keep paying for that subscription starts to go away.
So I think there are two things that these companies are doing really, really well to make sure that people continue to use their products over time. One is they're selling a hardware device, which means two things. One, they're getting a lot of revenue from their user upfront, as opposed to relying on SaaS subscription revenue. And two, it sort of escalates commitment.
So I'm somebody who's really been into mountain climbing for much of my life. There's this factor of like you go out and you buy all the equipment and it almost like makes you more excited to go do the mountain climb, right? Because now I have all this fancy equipment, I got to go use it. It's the same thing with these products. Like if you drop $300, $400 on an Oura ring or a Whoop band,
you're going to be more invested in using it and getting maximum value out of it. So that's the first piece is they've been clever about monetizing their product off of the hardware device as much or more than the subscription.
The second component of it, and I think Aura is truly best in class at this, is the velocity with which they are launching new features, new insights, explaining those new features to users either through the app itself or through emails or other channels is pretty remarkable. And so I think all of that contributes to longer subscriber retention rates.
I'll step back for a moment on this question because I think stats, streaks, badges, achievements, coins, currencies, they are all tactics rooted in this idea of gamification, which is like, how do I take my core value promise and the natural usage frequency of my product and bolt onto that this additional set of rewards that makes the user feel delighted?
Underlying that is like, what is the underlying motivation of your user? And so there's this great framework called the Octalysis Framework that I teach about in my Reforge course. This guy, Yukai Cho, invented the framework after spending many years in the gaming industry. And it talks about these eight core drivers of human motivation.
And so for products like Duolingo, some of the most important drivers for Duolingo's product are things like achievement. I want to feel like I've learned something new on Duolingo. Accomplishment. I want to feel like I'm learning the language and I'm learning it faster and better than my peers. There's a degree of ownership like...
I'm somebody who wants to become a good Spanish language speaker. And so I take ownership over that and I want to improve my ability over time. There's a little bit of social status, social influence. So this is where leaderboards comes in. I want to be viewed as somebody who is one of the best language learners in my language and in my peer set. And then the last one for Duolingo is avoidance.
I want to avoid losing my streak in their case, because there are people who have had streaks on Duolingo for months or even years. And that becomes a real thing that they want to avoid losing. So fundamentally grounding your understanding first in the core motivational drives of your user is important because that then informs the specific motivation tactics that you go build in your product.
And so for Duolingo, that has been streaks, achievements, leaderboards, because it taps into the underlying motivational drivers of accomplishment, ownership, social influence, and avoidance. But for other products, it may not look anything like that. And so you first need to understand what are the underlying drivers for your customer.
Yeah. So I think it's a double-edged sword. And I hate to keep going back to Duolingo, but they are one of the biggest success stories in consumer subscription. So I will in this case. Luis Van Ahen, the CEO there, has multiple times talked about their approach to notifications. And I've listened to a couple of podcasts where he talks about how he got this warning from...
one of the other founders that he looks up to that anytime you increase the number of notifications or emails you send in the short term, it's like the sugar high. It's going to lead to a short term pop in your metrics. But if you do that too many times, you kill the channel. And so it's really important to make sure that every incremental notification you're sending earns its place.
And to me, that means 2 things. One, it means that just having a statistically significant lift above baseline in a metric like DAU retention rate isn't good enough. It needs to be above... It needs to be a significant enough lift that it earns its place in the product experience. And then the second thing is, moving from science to art again,
it needs to fit within the holistic experience you're building for the user. And so if this notification is fundamentally making the user's experience a little bit better, and that could be because it's reminding them to come back and not lose their streak, or it could be something as simple as injecting humor and levity through Duo, the owl mascot, then great.
That's not just improving metrics that's leading to a better user experience. But if you're just heaping notification upon notification upon notification, you'll see your metrics keep going up until they don't.
Yeah. So you're saying you're taking the other side of the argument and you're saying that sending fewer notifications... There's so much supply.
So it's like a zero-sum game. If you don't send more notifications, then your mindshare will go down because all of these other products are just going to be bombarding users with notifications. I think that that is true in a vacuum.
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