🧱 Crypto product managers need to focus on user retention and not growth
TLDR; Founders want to build big expansive products. In my opinion, starting to build a big product with lots of use-cases is the wrong approach and is very difficult to pull off. It’s better to start planning your roadmap as a set of narrow overlapping use-cases with a tight narrative. We present a repeatable process to apply to your product roadmap to achieve product-market fit and wide adoption.
The outstanding 2x2 matrix
We will use the following infamous 2x2 matrix analogy to anchor our thinking:
If you’re thinking of a problem to solve, you have four options:
- Broad use-case / Light usage
- Broad use-case / Heavy usage
- Narrow use-case / Light usage
- Narrow use-case / Heavy usage
Our thesis is that it’s hard to build a product with broad use-cases from the get go. It’s easier to target a narrow use-case and then gradually expand scope as your product evolves.
Why focus on retention and not growth?
It’s still early days for DeFi.
DeFi has the potential to touch all seven billion people on the planet — and there’s going to be a multitude of products to serve all kinds of use-cases. No one product can serve all needs. People are incredibly diverse — a small business owner in China has different financial needs compared to a college graduate in Canada about to join the workforce.
By all optimistic measures, there are about 100,000 end-users using DeFi today.
In my opinion, it’s still early for the mass-market to adopt DeFi. There are a large number of unsolved usability, privacy and security issues that need to be resolved before marketing to a broader userbase is justified. It’s not all doom-and-gloom either: on Ethereum there’s a clear solution path to many of these problems. I’m confident that we are going to have a different landscape in just under six months.
So, why not take the time to research/iterate to the needs, aspirations, motivations and pain points of your target customer base before starting to focus on growing that userbase?
When DeFi takes off, you will be ready to capture that user growth sustainably.
The recipe for product-market fit
Note: This recipe is more geared towards dApps and consumer facing apps rather than protocols. We will have another follow up post for pick-and-shovel products like protocols, layer 1 chains and other infrastructure products.
Read the complete post on: https://www.covalenthq.com/blog/crypto-product-managers-focus-on-retention/
