Andrew Chen Archives

When I talk to startups about user growth, one topic that comes up is that there’s an overwhelming amount of noise out there on the topic. And on top of that, there’s a huge emphasis on the tactics – little tricks like turning buttons orange, or what cool new Facebook integration to try. These tactics are helpful, but without a broader framework to tie it all together, it can get easy to make 10-20% improvements but lack the approach to really substantially grow a product to the millions of users.

Below is my attempt to do a better job, and describe the mindset and experimentation needed to get to growth.

Download the PDF here

About a year ago, I participated in a series of interviews that would try and provide an intro text on the subject. The idea is just to provide a basic intro to thinking about user growth from an analytical standpoint. These interviews got turned into a PDF, sponsored by AppSumo, but then sat in my email inbox for months until I had the time to read through and approve it.

I’m happy to make it available here on my blog.

Outline of the PDF:

• Introduction
• Visual to spreadsheet based models
• Your signup flow
• Example of DailyDiary website
• Brainstorming about growth
• Shortening the signup flow of the DailyDiary site
• SaaS example with “TeamShare”
• Convert Now versus Free Trial
• Other random things to try
• Conclusion

This is a guest post by a friend of mine on email marketing. Elizabeth Yin is the CEO and a co-founder of LaunchBit, an ad network for email newsletters.  Previously, she worked at startups and Google, and went to MIT for her MBA, and Stanford before that. In her spare time, she enjoys writing posts about how to improve your email newsletter (fun hobby, I know :) ). Some other great posts include Can we improve your open rate and click-through-rate?, Why you should love Hotmail and Yahoo subscribers?, and Which links get the most clicks in an email newsletter?

3 common email marketing failures
by Elizabeth Yin, CEO of LaunchBit

Email marketing is one of those tricky marketing channels, where it’s tough to know what or how to improve.  So, my friends and I recently launched the Email Newsletter Report Card, which can analyze your email marketing campaigns of last year and give you an assessment of how well you’re doing.  This free tool integrates into your email marketing product and gives you grades for:

• your open rate
• click-through-rate
• list growth
• unsubscribe rate
• spam complaint rate

… all in the form of an infographic.  You can also see how your newsletter compares to other newsletters.

I run a few email newsletters on online marketing, anime, and startups.  This is what I learned from running my own newsletters through the Email Newsletter Report Card, which may apply to you too- here’s 3 common issues:

1. Email subscribers from bad customer acquisition channels
2. Too many links in each email
3. Sending emails at the wrong time

It turns out these issues are pretty easy to detect, and thus fix, which we’ll discuss below.

1) Email subscribers from bad customer acquisition channels (like Facebook!)
It turns out out that where your email subscribers come from plays a huge role in their engagement and quality. Even if your email subscribers double opt-in to the lists, you may still find that certain sources will hit “Spam” more often than others, thus endangering the spam scores of your emails.

Let me compare and contrast two newsletters- as I mentioned before, I have an email list on marketing, and another one on anime too.

My marketing newsletter has a 0% spam complaint rate across all of my campaigns of last year- here’s what my infographic looks like there:

I was surprised, because this is extremely rare.  The flip side is that I have a high unsubscribe rate.  So, it’s not that my audience loves my content — they just know not to hit the spam button.

In contrast, my newsletter called Anime Goodies shows a spam complaint rate nearly 5x the average and a much lower unsubscribe rate:

Most subscribers on the Anime Goodies newsletter came from Facebook.  And, even though these people double-opted into our lists, going forward, I’m much more cautious now of doing user acquisition for this list on Facebook.

Once your newsletters start going to spam, email clients, especially Gmail, start sending more of your emails to spam.  Furthermore, since this newsletter is on a shared IP address, once my audience starts hitting the spam button too much, my email service provider will move me to a “dirtier” IP to share with other spammers.  If I’m sharing an IP address where subscribers on other lists are hitting the spam button, my emails can be affected and go to spam even if my own audience stops hitting the spam button.  So, going to spam is a very bad cycle that I need to fix on the Anime list.

2) Too many links
If you are trying to optimize for users to click on a single call to action in your email newsletter, the best way to do this is to have fewer than five links and place the call-to-action in link #1 or #2.  Having more than 5 links actually distributes your clicks.

Right now, the average number of links is 23.3 per newsletter (the tool updates the average as more newsletters use it).  As you can see, another newsletter I own, called Startup Frontier, has on 9.4 links on average, which is a lot more links than I thought it would count.  Apparently, it is really easy to unknowingly add links, so that is something I’ll be more cognizant of going forward, since I want to improve my click-through-rate on specific calls to action.

3) Sending newsletters at the wrong time
Lastly, I typically send the Anime Goodies newsletter at 7pm GMT, but I just learned that most people open the newsletter at 6pm GMT — basically a day later:

Although the best time to send your email campaigns will vary across newsletters, I now know that for this particular newsletter I can change the send-time to get my message in front subscribers sooner.

Get your own email newsletter scorecard
If you’re interested in getting your own email newsletter graded, just go here. And below is an example of what the infographic output looks like:

Like any tech early adopter, I try and evaluate every new buzzy product that comes to market. These days, many of these come with built-in social and messaging functions.

“What’s the point of this?”
Most of the time I find my most common reaction is “hmmm, well this is neat, but what’s the point?” These new products often look trivial, even unfinished. And yet, I find my reaction is often wrong because of how hard it is to evaluate the “network” component of a new social product, when the network is often 95% of the value prop.

Network blindness
I find myself blinded by the following:

1. It’s hard to demo the network, when only a few people are on it
2. It’s even harder to connect w it if it’s not YOUR kind of network – Quora’s the exception to the rule :)
3. The typical # of connections you need with active users to really appreciate a product is something like 10-20, and it’s hard to break through that threshold if you aren’t acquired organically via invites from a dense network already
4. The value of the network rises exponentially, which is hard to comprehend. That means a network can rapidly go from useless to useful very quickly
5. Finally, the non-network components seem technically trivial – the 140chars, the snap, the ding dong. This leads to a “WTF” moment for many people

Imagine using Twitter for the first time, but no one’s on the network. The whole thing seems pointless, and while it’s easy to grok the mechanics of how it works, it’s hard to guess that “oh, one day 200 million people will be using Twitter and then it’s really useful to find out news, celeb gossip, articles, and chat w people.” It’s a communication network at its core, and without the people, it’s not very useful.

eBay, browsers, and other platforms and networks
Many platforms and networks are like this- think of eBay with only beanie babies, and the foresight it would take to think the network would go beyond collectibles. Or imagine using the web browser if the web was only a few thousand pages. The same things that make these really powerful networks later on are the same things that impede comprehension of their value in the early days.

Single user products
Contrast that with great single-user products like Evernote, an amazing mobile game, or a new 3D TV. The value is a lot more obvious and it’s easier to demo because there’s no network component. You don’t have to extrapolate.

In fact, extrapolation of network effects is so hard that it probably makes sense to just try to invest in stuff that already has an engaged network, even at a small level. And to look at stuff like network density, the activity of cross-network interactions, etc. from a metrics standpoint. But even at the end of that, you still need to make a big leap on if they can get to the next level :)