(Note: This post is full of spoilers for the 6/19 episode of Silicon Valley.) At Pied Piper’s 500,000th install party, Monica Hall (assistant to Raviga Capital CEO Laurie Bream) offered CEO Richard Hendricks an apology for her harsh feedback on the beta version of the Pied Piper app. She’d called Pied Piper “over-engineered” and barely sensical, but Richard and the team had heard nothing but praise from their other beta testers. They shrugged her feedback off. Now that they were nearly at a half million installs of the app, Monica was ready to eat her words. Then Richard dropped the bomb. “As you know,” he said, “Installs isn’t really the metric that matters. We need daily active users, people who come back to the platform.” Raviga wants to see a quarter million of these daily active users before they invest in a Pied Piper Series B.
MONICA: “Okay, so how many DAUs [Daily Active Users] do you actually have?” RICHARD: “What would be a number that would make you say ‘Euuugh, that’s bad?’” MONICA: “I don’t know, like 100,000?” RICHARD: “Oh.” MONICA: “Are you less? How much less?” RICHARD: “19,000” MONICA: “19,000 less than 100,000? 81,000? Oh god.” RICHARD: “No. Just 19,000. That’s the only number.”
Cue panic. Yep, that’s the face you would make if you just found out your product’s hugely hyped-up launch had just left you 231,000 active users short of your benchmark. The future of Pied Piper, the darling of Silicon Valley, was starting to look grim. [Tweet “What Pied Piper Should Be Doing to Boost #Retention @SiliconHBO “] Based on the user testing we see later, here’s how we think Pied Piper could pick up the slack, get those users back, and build the sticky app they deserve.
1. Find And State Their App’s Core Value
Three types of complaints dominate the focus group later in the episode:
- **The app doesn’t work: **“Where’s the Download button? Did they honestly forget to add a Download button?”
- **The value of the app is hard to see: ****“**When I put videos in my main folder, it says they’re uploaded, but when I look at the memory, it says 0 kilobytes used.”
- **The app isn’t friendly: **“The problem here is Terminator… I’m just saying, everybody died.”
Richard doesn’t understand how people could be complaining, and he has retorts for each piece of criticism. But Richard fails to see is that while Pied Piper’s technology is impressive, that’s not enough for a successful app. People aren’t getting it.
Start, Don’t End, With Customers
The complaints about the “0 kilobytes stored” message and Download buttons were particularly telling. “0 kilobytes stored” is not the kind of thing your users should see when what they want is verification that their upload was successful, while a Download button is what they should see—traditionally. Pied Piper’s technology, of course, means that barely any storage _will _ever be used and that downloading files _is _unnecessary. But if your product is going to break with tradition so dramatically, you can’t expect your users to keep perfectly up to speed. Richard is able (after what looks like hours of explanation) to address many of the issues raised and he leaves the focus group feeling excited about the product. He does it by explaining the actual value proposition of Pied Piper for what may be the first time in _Silicon Valley: _all of your files, instantly available, on every platform. In other words, no need for a Download button—just tap the file and it’s there. He makes a critical mistake after the user testing focus group, though. He interprets his success explaining Pied Piper as a sign that he should go do more and more promotional focus groups rather than getting back with his team and implementing these insights.
2. Focus On Retention By Simplifying The Product
While Richard is off advocating for Pied Piper to groups of confused early adopters, a video company is producing a step-by-step guide for them to run as an ad. The idea of the video is to bridge the now-obvious knowledge gap and teach regular people how to use Pied Piper. The result of the cash-strapped campaign is a horrifying, green, Clippy-inspired monstrosity that dances around their dashboard chirping, “Someone looks lost!”: Pied Piper doesn’t need to make an advertisement, though. They’d already poured a great deal of time and resources into promotion via tabling at conferences, a flashy car giveaway, their “Tables” launch ad, and further educational seminars. It wasn’t working. Their app’s bucket was leaking. When people fundamentally don’t understand your product, then acquiring more users is a waste of time. What Richard and his team need to focus on is simplifying their product.
How to start fixing the leaky bucket
As Fareed Mosavat of Instacart has said, it’s often the small operational issues—bugs—which can give you the biggest retention boosts early on. Richard might say the “0 kilobytes” message and non-existent Download button were features, not bugs, but changing the terminology does not change how they affect the end-user. What matters is whether the decisions you make in product and design garner results. In Pied Piper’s case, the decisions that were made created a product that was simply too hard to use. Fixing a problem like that requires a significant mental shift in how you approach your product. Building retention is not a job well-suited for the big-ego founder who believes that simplifying his product is equivalent to “cutting the wings off an airplane.” To do it, you have to swallow your pride, talk to your users, and then dig deep into your app with analytics. That’s what’s going to help you both diagnose and solve fundamental usability problems like:
- Activation: If lots of users are signing up for Pied Piper, spending a few minutes on the main dashboard, but then leaving—forever—it’s a good indication that there needs to be better, more guided user onboarding.
- **Usage: **If people are uploading a few files to Pied Piper but then signing off and never accessing them again, then the culprit is likely either bugs or a UI so confusing it’s driving away even potential customers.
While listening to individual users is incredibly valuable in the early stages, Richard and his team do have 19,000 active users whose behavioral patterns they can examine quantiatively as well. Diving into the analytics around specific points of user pain would help diagnose more clearly—and more convincingly—the nature of Pied Piper’s problems. Once they do that and fix the usability problems in the app, people will start to understand what Pied Piper is really delivering. The team’s acquisition efforts will begin bringing in users who stick around, and Pied Piper will be on the path to building long-term, sustainable growth.
3. Step It Up By Looking At What’s Going Right
We’ve written about the vagaries of the daily active user before. The team at Pied Piper certainly isn’t falling into the trap of getting overly excited about theirs—what they might be missing in their DAU numbers is actually the good news. Here are some metrics they could assess to see what’s going right:
- **Upload frequency: **How often their users are uploading files.
- **Frequency of files viewed: **How often users are accessing their files.
- **Storage per user: **How much each user is uploading to Pied Piper.
You can’t just be satisfied with having users who “get” your product. That’s the first step, but after that you need to start looking at how you can generate more of the behaviors that drive value both to your users, and by extension, to your company. No company can win with product if they sit on their laurels. Pied Piper should work on building an app the average person understands, but they should be looking equally hard at how to build an app that the average person loves.
Behavioral cohorts: engaged user analysis
The users who are uploading, downloading, and storing the most data are part of an extremely valuable cohort of users that Pied Piper would do well to probe. They could be just as informative, in their own way, as the focus group of totally lost users. By splitting up their user base into cohorts based on behavior rather than simply looking at them as one mass, the team could draw insights into how they can encourage similar behavior among other users.
- If the most frequent users are using Pied Piper for 4K video storage, for instance, then it might make sense to emphasize easy video storage upfront when they explain their product to customers.
- If the most frequent uploaders are using Pied Piper for photos, then perhaps it could be the seamless, universal photo album—the solution to an intractable problem even in our universe.
- If the most frequent users are getting started with the desktop version of Pied Piper and many of the lost ones are trying to navigate it on their phones, then there might be ground to put the desktop version first when marketing the app to new users.
Talking only to your disengaged users is effective, but it can’t be your only source of information for improving your app. While they may provide great insight into where your app falls apart, what you’re ultimately looking to do is deliver the maximum amount of value possible. Look at who’s getting that value already. Then extrapolate and figure out how to get more people to that level. [Tweet “Pied Piper’s problem: chasing #acquisition instead of #retention @SiliconHBO”]
The Danger In The Hype
What would you do if I told you that Pied Piper was a real app in the App Store? You’d probably go download it. You may not need the service they offer, but if you’ve been watching HBO’s _Silicon Valley), _then you’re probably going to try it out. After all, Pied Piper is hot right now. They won TechCrunch Disrupt. They successfully beat Hooli, the behemoth of the tech world, in a nasty legal dispute. And you don’t have to understand file compression to know how huge their 5.2 Weissman score was. (Source: IEEE Spectrum) But launching a product to a ton of hype is actually really dangerous. As the Pied Piper team found out last Sunday, even the perception that your product doesn’t live up to its hype could be deadly. And you can’t cure that perception with click farms and other sleight-of-hand tricks. You cure it by doing a few simple, repetitive things long past the point where other people would give up or lose interest. You watch how your users interact with your app. You digest their feedback and look at the numbers. You build a better version of your product. And you repeat. Here’s hoping the Pied Piper team reads our post before it’s too late. 🙂
Felipe Cardoso Barbosa: 🙂