What To Do If Your Product Isn’t Growing

How ‘Critical User Journeys’ can help a product take off

As a founder, product lead at Pinterest and PM for a couple products at Google, as well as a growth partner for Initialized Capital, I’ve seen many product teams struggle to grow. Many products start out with a bang. Some find product-market fit with sustained growth. Few have gone through spurts of hyper-growth. But more often than not I’ve seen most of them linger then fizzle.

Throughout these experiences, I have noticed a common pattern that almost every startup founder falls into as they begin this journey. Founders launch their product, wonder why it isn’t growing like gangbusters and then immediately try to fix their growth problem.

They turn to growth tactics like optimizing their on-boarding funnel, SEO or push notifications before really understanding what they are building and who they are building for. This may create an initial burst of short-term growth. But it ultimately leads to high churn of your possible customers, while ignoring problems in the core product.

Before trying different growth tactics like throwing spaghetti at a wall, startups need to take a fresh look at their users, evaluate their product end goals and re-define the journey they want their users to take to get there. Here are some tips that can help define a path which will clarify the different steps needed to unlock product growth.

Map out your ‘Critical User Journey’

Many startups build a product without knowing what path they want their users to go down. If you look up the phrase “Critical User Journey,” you’ll find a plethora of UX frameworks and user maps. These are great, but can be overwhelming and daunting.

Early startups should start simple and make sure they know the optimal journey they want their product to fulfill for the user.

Your Critical User Journey should focus on a single use case with a specific goal and include the surrounding context for the user. For example, one of the journeys that Pinterest is focused on is helping a user find ideas around their own personal style. A Pinterest user typically starts from browsing a large visual catalog of style ideas, and then progresses to discovering the right looks that fit their own style.

Then Pinterest allows users to curate their own look books, style boards and eventually make it seamless to buy those looks, whether that’s directly on Pinterest or through a deep link to the merchant. The happy case is that the whole journey is completed on Pinterest. Now Pinterest has grown over the years to become a large company and fulfills multiple user journeys.

Pinterest guides users through each step of Personal Style Discovery: Browsing, Filtering, Curating, and Fulfilling

Founders starting out need to have clarity on the specific ‘Critical User Journey’ they are fulfilling. Then they need to understand how their product helps users along each step of that journey.

Measure your ‘Critical User Journey’

Once founders have a crafted a user journey, they need to be ruthless and specific on how they measure it. All successful startups have a plethora of top-line metrics (or KPIs) they measure and there are many great tools to help visualize this. For startups just starting out, it’s very easy to fall into choosing vanity metrics like MAU (Monthly Active Users) or a sum total measurement metric that looks like it is growing and lose sight of what is actually happening.

source: https://blog.kissmetrics.com/throw-away-vanity-metrics/

Instead, early startups should start with actionable top-line metrics to measure each step of the Journey. Start with two metrics: One user acquisition metric at the top of the funnel that measures how many new users are signing up and taking their first action. And then one user engagement metric further down the funnel that measures how often these new users engage with the product over time. Together, these two metrics define a product’s activation rate in how it graduates new users into becoming active users. From here you can add additional top-line metrics that are specific to your product and user journey.

The more specific top-line metrics are to a product’s user journey, the better they are at helping startups make decisions.

For example on Google Assistant, we measure user activation based on the user making at least one successful query that day on a specific surface (i.e. Pixel phone) in a specific country (i.e. U.K.) using a specific feature (i.e. Ask about “My Day”) within their first two weeks.

Identify ‘product levers’ that help move users along their journey.

Many startups chose top-line metrics but are not able to directly move any of them in a measurable and systematic way through projects and work streams. Having numbers to measure is only good if you know how to move them with the right product levers.

A product lever is something that is moveable and measurable that connects projects your team is working on on to top-line metrics that you care about.

For example, one of Initialized Capital’s portfolio companies I worked closely with chose the top-line metric ‘L7 Engagement,’ or the number of days a user has been active on the product during the last seven days). They chose the primary product lever to drive this as “Additional Actions taken per User.” They narrowed down the projects they were working on to only ones that drove additional actions per user (such as showing more in-line suggestions, creating off product promotions, sending contextual follow-up notifications, etc.) and cut the ones that didn’t. They saw their L7 Engagement rate turn around after a few experiment cycles and they expanded their focus to an additional product lever to drive L7 Engagement.

Don’t add so many features that the ‘Critical User Journey’ becomes obscured.

Another common pitfall all founders are pulled into is to “fix” growth by adding more and more to your product to “see what sticks.” Growth by product addition is hard to measure and rarely scalable.

For example, I worked with one portfolio company that had a great product serving a user need. They were driving a meaningful metric yet they were seeing stagnant month-over-month growth. Upon looking closer, we saw that they had built multiple convoluted activation flows on top of each other. Each flow they released showed slight overall gains, so they kept going and building more flows on top of each other. Soon enough, they couldn’t tell which flow was directly responsible for retaining or losing users. Their product became a Rube Goldberg machine spitting out one user at a time.

A Rube Goldberg machine — complicated mechanics for a simple output

Once we simplified the product down to one activation pathway with each flow directly moving a specific product lever, their conversion rates went way up. This was mostly because their product became simpler. It was easier for users to understand and easier for the company to see what was going when users got stuck.

Taking a step back to simplify and focus freed the product to grow.

Let your most engaged users show you the way.

This one may seem obvious, but sometimes users have done the hard work for you. Startups should look at their most engaged users and deeply understand the actions and pathways they took to get there.

Find a cohort of your most engaged users and look backwards. Identify what actions they took the first day, the week, the first month, and subsequent time periods to get to their state. Identify these actions as pivotal moments you want new or casual users to take at each step of the journey. For example, if taking four actions in the first week led users to be more engaged the second week, prioritize these actions for new users in their first week over anything else.

Create engagement loops around these actions to encourage users to continue down the pathway to take another action after completing a previous action. And of course, measure and monitor how many users are taking these actions at each step of the journey to see the holistic engagement picture of your product.

If you know exactly what actions and steps your best users took, you should try to replicate their journey for others.

Defining one ‘Critical User Journey’ for your product is a start and will serve as an early guide to define metrics, clarify what users need to do at every step, and help prioritize the right product levers to create sustainable growth.

When you are ready, this framework can expand to several user journeys that either deepen engagement of existing users or broaden use cases to reach new sets of users.

Welcome Alda and Brett!

I’m pleased to announce that Alda Leu Dennis and Brett Gibson have joined the Initialized Capital team.

A common refrain at our firm is that we’d be a pretty killer startup if we weren’t busy funding and advising tomorrow’s best early stage startups. Our partnership has expertise in almost every essential discipline needed to build high growth startups: engineering, design, product management, operations, legal, finance, communications and marketing.

We’re proud to say Alda and Brett are helping us get both deeper and wider on that front.

Alda Leu Dennis joins us as Partner & COO. She’s bringing decades of sharply honed legal and operating experience to both Initialized and our portfolio companies. She previously was a managing partner at 137 Ventures where she led investments in Planet Labs, Wish and CourseHero. Before that she was COO at Airtime, General Counsel at Founders Fund, Assistant General Counsel at Peter Thiel’s Clarium Capital Management, and practiced as a litigator for IP disputes at WSGR. She graduated from Stanford with bachelors degrees in economics and political science, and a JD from UCLA.

Brett Gibson joins us as a Partner. He’ll be working closely with our portfolio helping them build world-class software teams, as well as build software that supercharges what we can do as a partnership and founder community. He co-founded both blog platforms Posthaven and Posterous (which was acquired by Twitter) and also worked closely with me on the Y Combinator software team, where the two of us built and re-wrote many of the essential software systems that run interviews, applications, events, and the internal alumni social network. He was a founder in the YC S08 batch with Slinkset, a link-sharing community site. Prior to that he cofounded DrawHere, a browser drawing startup acquired by DeviantArt in 2006. He graduated with a BA in philosophy from University of California, Santa Barbara.

Most venture capitalists end up lone-wolfing the way they do their business. We’ve built our team in a way where the opposite is true — when Initialized funds you, you’re not alone. You get the full force of our partnership to help you think through the engineering, design, product, marketing, legal, and strategic challenges that every startup must overcome.

A newly funded Initialized portfolio founder recently told us they got so much out of our team that they wanted to double check that they weren’t going to get a consulting bill. We laughed and said our investment check to them was all the compensation we needed.

Why Initialized invested in Better: Software that files medical claims for you automatically is indistinguishable from magic

Health insurance remains one of the most file cabinet-y of file cabinet industries in our modern age. 

This is the realm of fax machine and call centers, and the quality of service you get from these modern day bureaucratic nightmares can vary greatly. Most disturbingly, the poor user experience is possibly intentional— random call drop rates for some phone requests can be as high as 20%, which really reduces the chance customers actually get their claims actually paid out.

Luckily, when a smart team comes along with a software-first approach to tackling such a file cabinet industry, we love to roll up our sleeves and get involved. 

We’re proud to lead the $1.1M seed round in Better alongside Designer Fund and top angels including Karma & Tapjoy founder Lee Linden, Rock Health founder Halle Tecco, and Mixpanel cofounder Tim Trefren

The team has filed around $1,000,000 worth of claims on behalf of patients since starting late last year. Users just download the app (Better — Health Insurance Claims Made Simple) and upload a photo of their insurance card and any medical claim you might have. Better takes care of the rest, and advocates on the user’s behalf so that they get reimbursed, and will also correct any billing errors found in the process too. 

The service works great for all kinds of out-of-network medical expenses, and has been used across all types of reimbursements including therapy, psychiatry, acupuncture, chiropractors, dentists, lab tests and medication. 

“In America, patients frequently can’t afford to access the care they need and get trapped in a bureaucratic nightmare whenever they try to use the insurance they pay for,” CEO Rachael Norman said. “Better’s mission is to make healthcare simple by supporting patients.”

That’s what we particularly love about this founding team: how truly mission driven they are. Rachael previously managed operations at analytics startup Mixpanel and Bitcoin hardware company 21, and John Stockdale was a site reliability engineer and open source advocate at Facebook. They started working on this when they realized how many maddening hours are lost fighting with health insurance companies over bills that should obviously be paid. 

Patient advocate platforms have existed for years, but they historically have been just as paper-oriented as the health insurance companies they try to save their customers from. Healthcare remains a $3.2 trillion per year industry, and at 18 percent of US GDP, at least thirty cents of every one of those dollars is spent on people, systems and processes that manage administrative tasks. If a smart software system can streamline this process, it can do a whole lot more than just make our lives more convenient. 

You can also read more about what founder Rachael Norman learned while building Better, or read their launch article at TechCrunch.

Better is available now and is currently free during the beta at https://getbetter.co.

Why Initialized invested in Plate IQ: Software Eats The Restaurant Industry

Restaurants spend billions of dollars every year without knowing where it goes. Bhavuk Kaul and his cofounder, Ram Jayaraman, have spent years designing and creating product at top companies, now they’re applying their expertise to help restaurant owners.

We are proud to be investing in Plate IQ, a YC graduate that is re-imagining how restaurants manage their expenses.

Restaurants are not an easy business. But they are big one. U.S. restaurants gross $799 billion restaurant revenue each year. Despite the scale, the technology available to the average restaurant owner isn’t much more advanced today than it was 20 years ago. Thanks to Plate IQ, that’s about to change.

Using OCR, Plate IQ is able to automatically process invoices and drastically simplify back office operations. Plate IQ automates payments and to date has saved its customers over 135,000 hours in time that would be spent on manual entry and bill paying. On top of that, they connect each restaurateur with their real time spend, identifying key trends and foregrounding unusual fluctuations. To date, their platform has processed over $675 million dollars worth of invoices, tracking changes in prices across every purchase a restaurant makes.

This previously untracked data allows restaurant owners to understand the real costs of discrete menu items in real time and adjust price and recipes accordingly. Because they are deployed across such a large range of restaurants, from Sprig to French Laundry, they are able to surface price averages for every item in each restaurant vertical. This gives owners never before seen visibility not just into their own restaurant but into the industry as a whole.

As a firm we frequently talk about the divergence of user experience between consumer and enterprise software — people use a beautifully designed application to take a picture of their kale at lunch but use inefficient, antiquated software for 8 hours a day. With Plate IQ we hope all restaurant owners can have a world class experience managing their business and are finally able to replace file cabinets storing year’s worth of invoices with great software.

Try Plate IQ now on your iOS device — http://apple.co/plateiq-tip, and read more about the company on TechCrunch.