Sarah Tavel: observation

Transcript context

…What I want to do with our time together is dig into two frameworks that you've developed and use with founders that you work with to help them build successful companies. One is focused around customer businesses, and one marketplace businesses. Let's just start with the first framework. I think you call it the Hierarchy of Engagement. Just to start, could you maybe just share a broad overview of this framework? And also, just where it emerged from, where you came up with this concept? Sure. I think one thing you'll notice about me is that I have an allergic reaction to vanity metrics, what people talk about as vanity metrics. When I made the transition from Pinterest, where I was leading product for the discovery team, so I was responsible for all the discovery surfaces on Pinterest. The home feed, the search, the recommendations, a couple other teams. Ultimately, what those teams were about was about engagement, increasing engagement of Pinterest. It was helping people, when they were on Pinterest, find something that they loved enough that they wanted to pin it to one of their boards. When I started to meet with all these really talented consumer founders building consumer social products, this was during a time when everybody was getting excited about growth hacking. What you would see is that you would see all these founders coming in, and they all had these up and to the right graphs, whether it was sign-ups, or downloads, or MAUs. It felt to me like it wasn't obvious that those metrics that they were all getting very attached, and focused on, and showing in these presentations was the wrong thing to focus on. It didn't get to the heart of whether they were on the path to building enduring consumer social product. They were missing, at the core, the criticality of engagement. I just started to feel this and it became like a pebble in my shoe. I started just to go through that process that you've gone through many times before of writing and distilling it, and that's where I came up with this hierarchy. What you realize when you look at social products is that they're almost is this action which I call the core action of that product that forms the foundation of the product. When a user completes this action, it's clear that they both understand the utility of the product, they understand what that product is all about, and it's an action that, if they perform the action, they're very likely to come back. So for Facebook, the obvious action is friending, in the beginning days. For Pinterest, it's pinning. I don't know if you're an Evernote user. For Evernote, it's writing a note. When you perform that action, that means you're an engaged user. Of course, there's a lot of other actions that you have to do. You can follow people on Pinterest, you comment on Facebook. But the end of the day, if you're not doing that action, you're not really a user to the product. That's why the MAU thing doesn't really mean anything. It's really looking at, I think, of users completing the core action. You can look at this as a cohort, weekly, daily, whatever the right cadence is. But that's the foundation, that's level one. Basically, there's some definition of an active user that a consumer business basically needs to define, and essential figure out what is that action they're taking that makes them an active user versus just opening up the app, or whatever it is. For Snapchat, it might be sending a snap.…

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