To complicate matters, it’s not just financiers that depend on the system that has been set up. We all do. University endowments, pension funds, and 401Ks are wedded to this financial system. We all want the stock market to keep going up. But quick return-on-investment style capitalism has costs. It means that every public company is under pressure to make more money quarter after quarter. Consider a company like Facebook under this model. Sure, Zuckerberg might have a controlling share of the company, but his ability to keep engineering talent is dependent on increasing the stock price. To do so, Facebook has three options. They either need to find more users, make more money per user, or diversify their portfolio of money making services. Only so much of that can be doing without tripping over the edge into exploitation.
…ians are trying to do. Or what my colleague Nancy Baym highlights has been necessary for musicians. In order to be effective journalists, you need to find a way to be a part of the social fabric of America and you need to knit that fabric together through your connections. That’s the innovation that’s most critical — and most unfamiliar — to those in the news business.
r example, Facebook is sticky…le market — and with respect to the balance between new user acquisition, churn and resurrection. Ideally, the new users you acquire as your product grows would continue to engage with the product forever. That’s retention — the measure of people who tried the product and liked it enough to return. Many consumer-facing businesses define retention in terms of the percentage of users who take a given action such as logging in or sending a message within a certain period of time following sign-up. Subscription and SaaS businesses tend to define retention in terms of dollars spent within a certain period of time after the user’s first spend. While stickiness generally drives retention, a product that is retaining and growing well may not necessarily be sticky. Retention is simply about users returning to your product; stickiness is about them returning of their own volition. Stickiness helps reduce your dependency on tactics such as push notifications. For example, Facebook is sticky because of users’ urge to share, and because of their curiosity about other people’s lives.
Set two goals: an 80–20 and a 50–50. 80–20 goals are the ones you have an 80 percent chance of achieving. These goals are attainable, and hitting them will motivate the team. However, they will not help the team stretch and perform at a higher level. Therefore, it’s also important to set 50–50 goals, which you have only a 50 percent chance of achieving. While these goals are more challenging, they are also far more satisfying to reach. Whatever you do, don’t “sandbag” by setting only goals you can easily achieve. Failing to set the bar high can lead to complacency on the team and a decline in the product. If you find you always reach or exceed your 80–20 or especially your 50–50 goals, it’s likely you have set your sights too low.
Teams often think about metrics and goals simultaneously, as they cannot easily be separated. Once you have identified the right metric and goal, you will be prepared to define a strategy and roadmap against which your product team can execute. Goals should highlight what you hope to accomplish and are often stepping stones to accelerating business growth. They can unify your company around a common objective and hold your team accountable for its promises.
I want all 35 full-time Surf Simply employees to get to the same point. I will feel like the business succeeded only when all of us are at the point where any increase in salary would not increase the happiness in our lives. That’s a clear goal I want to reach.” — Ru Hill