Product Lessons from the Early Days at Friendster by Dan Olsen
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Product Lessons from the Early Days at Friendster by Dan Olsen

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Talk I gave at Greylock Partners' & Samsung's event "How to Build Great Products" on product lessons learned from the early days at Friendster.

Talk I gave at Greylock Partners' & Samsung's event "How to Build Great Products" on product lessons learned from the early days at Friendster.

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    Product Lessons from the Early Days at Friendster by Dan Olsen Product Lessons from the Early Days at Friendster by Dan Olsen Presentation Transcript

    • Product  Lessons  from   the  Early  Days  at   Dan  Olsen  How  to  Build  Great  Products   April  12,  2013   Copyright  ©  2013  Olsen  SoluFons  
    • My  Background  n  EducaFon   n  BS,  Electrical  Engineering,  Northwestern   n  MS,  Industrial  Engineering,  Virginia  Tech   n  MBA,  Stanford   n  Web  development  and  UI  design  n  20  years  of  Product  Management  Experience   n  Managed  submarine  design  for  5  years   n  5  years  at  Intuit,  led  Quicken  Product  Management   n  Led  Product  Management  at  Friendster   n  CEO  &  Cofounder  of  YourVersion  (personalized  news)   n  Product  consultant:  Box,  YouSendIt,  Epocrates,  Chartboost     Will  post  slides  to  h[p://slideshare.net/dan_o     Copyright  ©  2013  Olsen  SoluFons  
    • 5
    • Se_ng  the  Stage:  Summer  2004  n  2002:  Friendster  launches  n  Mar  2003:  Friendster  opens  to  public  n  Aug  2003:  MySpace  launches  n  Oct  2003:  Friendster  raises  $13M  from   Kleiner  &  Benchmark  n  Feb  2004:  Facebook  launches  n  April  2004:  Abrams  replaced  by  interim  CEO  n  June  2004:  New  CEO  hired   Copyright  ©  2013  Olsen  SoluFons  
    • Wild  West  of  Social  Networking:  Friendster’s  CompeFFon  in  2004   Copyright  ©  2013  Olsen  SoluFons  
    • Wild  West  of  Social  Networking:  Friendster’s  CompeFFon  in  2004   Tier  1   Tier  2   MySpace   Facebook   Orkut   Tickle   MulFply   Ryze   Hi5   Classmates   Tribe   Match   LinkedIn   Xanga   Blogger   Copyright  ©  2013  Olsen  SoluFons  
    • Global Competition: Unique Visitors •  We are currently the global leader but everyone is growing •  Orkut was above us in August •  Hi5 is gaining ground internationally 7,000 6,000 FriendsterUnique Visitors (000s) 5,000 Orkut Friendster 4,000 MySpace MySpace Hi5 3,000 Orkut Hi5 2,000 1,000 0 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep 03 03 03 04 04 04 04 04 04 04 04 04
    • U.S. Competition: Unique Visitors US Unique Monthly Users (000) 2500 2000 1500 1000 500 0 N 3 M 4 Se 3 O 3 04 D 3 Ja 3 03 Fe 4 04 Au 3 Au 4 Ju 4 M 4 Ap 4 -0 r-0 0 0 -0 -0 0 l-0 l-0 -0 -0 0 g- p- g- n- n- n- b- ct ov ec ay ar Ju Ju Ju 1 MYSPACE.COM 2 FRIENDSTER.COM10
    • •  Open  vs.  closed  network   Connected  to  Tom   At  most  2  degrees  away  •  Profile  personalizaFon  •  Music  •  Groups  •  Chat  (IM)  •  Blogs  
    • ObjecFves,   PrioriFes,  &  Resource  AllocaFon   Copyright  ©  2013  Olsen  SoluFons  
    • Business  ObjecFves   1.      Provide  a  Compelling  Product  Experience    1.a.  Ensure  good  site  upFme  (availability>  99.5%)    1.b.  Ensure  fast  site  performance  (page  render  Fme<  2  seconds)    1.c.  Ensure  good  user  saFsfacFon  (>x%)    1.d.  Ensure  good  ease  of  use  (>y%)    1.d.  Ensure  strong  product  value  proposiFon  relaFve  to  compeFFon    1.e.  Ensure  good  user  info/content  (current,  accurate,  detailed)   2.  Grow  US  Ac>ve  Users    2.a.  Improve  new  user  acquisiFon  (>  z  new  users/month)      2.a.1.    Improve  viral  acquisiFon  (e.g.,  avg  #  invites  per  user)      2.a.2.    Improve  non-­‐viral  acquisiFon  (e.g.,  acquire  users  at  CPA<$y)      2.b.  Improve  retenFon  of  exisFng  users  (retenFon  rate  >  x%)   3.  Grow  Revenue    3.a.  OpFmize  exisFng  business  models  (direct  sell-­‐through  %,  CPM)      3.a.1.    Grow  US  adverFsing  revenue      3.a.2.    Grow  internaFonal  adverFsing  revenue    3.b.  Experiment  with  new  business  models  15 Copyright  ©  2013  Olsen  SoluFons  
    • Product  ObjecFves  &   Engineering  Resource  AllocaFon        1  -­‐  2      3  -­‐  4  Months  Months    30%    50%  1.  Provide  Compelling  Product  Experience        -­‐  Ensure  good  upFme  and  performance        -­‐  Improve  Usability        -­‐  Enhance  Value  ProposiFon    60%    30%  2.  Grow  US  AcFve  Users        -­‐  Improve  viral  acquisiFon        -­‐  Improve  yield  of  acquisiFon  process        -­‐  Improve  retenFon  &  frequency  of  use    10%    20%  3.  Grow  Revenue        -­‐  OpFmize  exisFng  ad  placements        -­‐  Experiment  with  new  ad  vehicles        -­‐  Experiment  with  new  business  models   Copyright  ©  2013  Olsen  SoluFons  
    • Grow  US  AcFve  Users   Copyright  ©  2013  Olsen  SoluFons  
    • Copyright  ©  2013  Olsen  SoluFons   Copyright  ©  2013  Olsen  SoluFons  
    • Product MarCom Metrics/Research AcquireReactivate Retain Copyright © 2013 Olsen Solutions
    • Product MarCom Metrics/Research VH Address Book Scraper • US mthly active uniques data VH Improve Registration • Friendster monthly signups H Invitation Reminder Email • # of visitors to Friendster.com • Registration Data Acquire H Prospect Tour • Friends Invite Data H Improve Invite & Find Friend Features M Invitation Email Optimization M Extending site access to non-registered members • US Orphans Data VH Recurring newslettersReactivate Orphan Strategy VH New Product Features • Cancellations • Emails Data Retain • Add a Friend Data Tutorials • Lapsed User Survey Copyright © 2013 Olsen Solutions20
    • OpFmizing  Viral  AcquisiFon   Copyright  ©  2013  Olsen  SoluFons  
    • Friendster’s  Viral  Loop   % of users sending = 15% Invites per Invite invites sender = 2.3 click-through rate Active Invite Prospective Click Registration Fail Users Users Process% of users who are Succeed Don’t active Click Conversion = 85% Users rate•   MulFplied  together,  these  metrics  determine  your  viral  raFo  •   Which  metric  has  highest  ROI  opportunity?   Copyright  ©  2013  Olsen  SoluFons  
    • The  Upside  PotenFal  of  a  Metric   ?   100%   100%   85%   15%   2.3   0   0   0   RegistraFon   %  of  users  sending   Avg  #  of  invites   Process  Yield   invitaFons   sent  per  sender  Max  possible   0.15  /  0.85  =  18%   0.85  /  0.15  =  570%   ?  /  2.3  =  ?%  improvement   Copyright  ©  2013  Olsen  SoluFons  
    • Okay,  so  how  can  we  improve  the  metric?  n  How  do  we  increase  the  average  number  of   invites  being  sent  out  per  sender?  n  For  each  idea:   n  What’s  the  expected  benefit?  (how  much  will  it   improve  the  metric?)   n  What’s  the  expected  cost?  (how  many  engineer-­‐ hours  will  it  take?)  n  You  want  to  idenFfy  highest  ROI  idea   Copyright  ©  2013  Olsen  SoluFons  
    • Aver  Launching  Address  Book  Importer…  25 Copyright  ©  2013  Olsen  SoluFons  
    • Aver  Launching  Address  Book  Importer…  25 Copyright  ©  2013  Olsen  SoluFons  
    • Aver  Launching  Address  Book  Importer…  25 Copyright  ©  2013  Olsen  SoluFons  
    • ReacFvaFng  InacFve  Users   Copyright  ©  2013  Olsen  SoluFons  
    • Personalized  Emails  Had   Amazing  User  Engagement  n  627,204  sent  n  615,402  delivered  98.1%  delivery  rate  n  248,627  opened  40.4%  open  rate  n  120,343  clicked  48.4%  click  rate  (opened)    19.6%  click  rate  (delivered)       Copyright  ©  2013  Olsen  SoluFons  
    • Personalized  Emails  More  than   Doubled  ReacFvated  Users  
    • Retaining  AcFve  Users  30 Copyright  ©  2013  Olsen  SoluFons  
    • Olsen’s  Hierarchy  of  Web  User  Needs   (adapted  from  Maslow)   Customer’s Perspective What does it mean to us? How easy to use is it? Usability & Design Satisfaction Increasing Does the functionality Feature Set meet my needs? Does the functionality work? Absence of Bugs Dissatisfaction Decreasing Is the site fast enough? Page Load TimeIs the site up when I want to use it? Uptime Copyright  ©  2013  Olsen  SoluFons  
    • Friendster Q4 Product Roadmap Add to existing messages1. New Features 1-to-many:Enable Members Ability to select Discussion Groupsto Better multiple friends BoardsCommunicate & -Public -Public -PrivateInteract Ability to define -Private subsets of friends Instant Messaging2. Improve UI & Usability CSS cleanup Header & Global Messaging Gallery UI Profile cleanup Nav cleanup UI cleanup cleanup & extensibility3. Better & More Photos: More & bigger Dynamic Content Blogs/ Link to Links to my Links to most Blogs RSS: mine favorites popular4. Improve Prospects Tour on Exposing parts of the Friendster New User Friendster.com site to non-registered users Acquisition
    • So,  What  Happened?   Copyright © 2013 Olsen Solutions
    • “Network  Effects”:   Not  all  Networks  are  Created  Equal  Network  Type   Broadcast   CommunicaFon   Social  Law   Sarnoff   Metcalfe   Reed  Example   Cable  TV   Fax  machines   Social  network  Network  value   N   N2   2N  proporFonal  to   (linear)   (squared)   (exponenFal)   Copyright  ©  2013  Olsen  SoluFons  
    • For  Social  Networks,  Number  of  Users   Is  A  Very  Important  “Feature”   Reed’s Law ~2N Network   Users   Value   ~N2 2x   4x   ~N 3x   8x   4x   16x   Details:  h[p://www.reed.com/dpr/locus/gfn/reedslaw.html   5x   32x  35 Copyright  ©  2013  Olsen  SoluFons  
    • Lessons  Learned  n  When  you  have  contenFon  for  resources:   n  Define  objecFves  and  prioriFes  and  get  buy-­‐in   n  Explicitly  allocate  resources  n  Improving  your  product   n  High  ROI  opportuniFes  usually  exist   n  Define  causality,  track  metrics,  and  iterate  n  If  problems  arise,  focus  on  lowest  level  first   n  Live  site  issues  trump  new  features   n  Say  “no”  to  other  things  unFl  bleeding  stops  n  For  social  products,  size  of  user  base  ma[ers   Copyright  ©  2013  Olsen  SoluFons  
    • QuesFons?  @danolsen  h[p://linkedin.com/in/danolsen98  h[p://slideshare.net/dan_o  h[p://olsensoluFons.com     Copyright  ©  2013  Olsen  SoluFons