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March 12, 2012

Once Is Not Enough: Optimize Repeat Before Trial

Think about how often you check Facebook. Some of us spend more time on the site than others, but 50% of users go back every day. When you’re building a new product, that kind of addictive experience has got to be your goal. You’re facing three challenges: awareness, trial, and repeat. You’ve got to make sure people know your product exists, and then you’ve got to convince those people to actually try it out. Then you’ve got to make those people repeat using it - as often as possible.

I recently met with a new app company that’s absolutely crushing that first challenge. A chart of their new user trial looks like a hockey stick, curving up and to the right - a kind of rapid growth that’s very impressive, and very hard to achieve. The company was successfully using Facebook and Twitter to virally spread awareness, and the idea of their product was interesting enough to get people who became aware of it to try it.

There’s just one problem: Only 1 out of every 5 people who tried the product would come back to use it again. And those who did repeat were doing so sporadically, at best.

I asked them about those repeat numbers, and they said they were focusing on driving trials right now. They were celebrating. I wasn’t.

It’s really hard to get people to try something new. To lose 80% of the people who actually care enough to check your product out is tragic.

Trial is important. But I’d suggest focusing on what will get people to keep coming back before you spend a lot of time getting them to show up once. Repeat users create value. Facebook’s addicted user base is the reason its valuation is sky-high. I saw Twitter’s repeat recently, and it’s confidential, but let me tell you, it’s stunning.

You’ve got to understand what drives repeat for your product. Why are users not coming back? What characteristics do repeat and non-repeat users have in common? Are repeat users doing something different with the product than one-time visitors? If you’re able to show strong repeat rates and gather useful data about that cohort of visitors, you’ll definitely be able to get people to try out the product -- and you’ll be able to raise money to help make that happen.

What other products are you aware of with fantastic repeat rates?

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Alex Kinnier

Alex Kinnier is a Venture Captial Partner at NEA. He's an Xoogler, a passionate product developer (from ad servers to air conditioners to Febreze) and a fan of NYC pizza. He is a father of 2 angels.

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