Ensuring Product Adoption

Product Adoption, often realized as traction, is the ability of a new product to capture the attention, engage and modify the behaviors of a group of users.

I have been fascinated with the dynamics of product adoption since I started developing strategic (not operational, but good for you) software systems on the first version of Lotus Notes back in 1989. In 25+ years of systems development and literally hundreds of projects I have noticed patterns in which some products get traction and some products don’t.

The Product Adoption Problem

Many of our clients come to us thinking that product adoption (or traction) will be no problem.

• “If you build it, they will come”
• “If you build a better mousetrap, the world will beat a path to your door”

These sayings were discredited long ago. So why do we continue to develop products without first ensuring that they will capture the public eye, change behaviors and sustain engagement with a group of users?

For entrepreneurs, our product concepts are very much like our children. We birth the idea, we nurture our concepts along through many iterations of improvement. We love our products like our children. So how come nobody else can see how special our product concept truly is?

Why should the public love our products the same as we do? By Christmas 2013 we will have 1,000,000 apps to choose from in the Apple store.

Let’s talk about how to overcome the noise of one million competitors.

Bill Smith’s Adoption Formula

Simply stated the opportunity of adoption is directly related to the ratio of immediate reward to required behavioral change.

In math language

Adoption ~= immediate reward / behavioral change

In English

The more behavioral change we require, the more we have to reward people. Further, rewards must be immediate and well communicated.

It’s hard to have an original thought in this wide & busy world, but I have never heard this anyplace else. So I am happy to call it Bill Smith’s Adoption Formula.

How do we apply the Adoption Formula to make better products?

Product (Customer) Adoption Process

To succeed, we have to be realistic. We have to assume that users are lazy, ignorant and selfish. Now I am sure the app using public are all good people, but when they are evaluating apps, people are using their lizard brains. Consequently, if your app doesn’t deliver the goods (immediate reward) on the first use, not even your own mother is going to try it a second time. “Lazy, ignorant and selfish” it seems like I have a low opinion of app users. Not at all. We must love our users and love the challenges that they present us with. Let’s attack each problem in turn.

Overcoming Lazy

I recently presented my good friend Dave, a venture capitalist, with an awesome product concept. I had a beautiful lean business canvas (1 page business plan) full of important insights and benefits.

The product was an enterprise collaboration tool, and it offered efficiency, better profitability and better careers, but not on the first use. Dave blew me off in 5 seconds. Dave’s answer was “I want to sell pain pills, not vitamins”.

So we are still on the drawing board. We are out of the building interviewing customers. We are looking for that pain point that will make the enterprise collaboration product a success.

By the way, adoption is the big problem faced by all enterprise collaboration products, I have seen projects touted as big successes with only 1% adoption.

Thank you, Dave, for saving us years of work and thousands of dollars on a product with an unfinished adoption strategy.

Overcoming Ignorant

Ignorant is an ugly word. So again I apologize, but it’s necessary to shock entrepreneurs into this reality.

Even though entrepreneurs think about their products 24x7x365, nobody else should be expected to know whats so great about their new app.

To save our clients time and money (see Dave’s advice above) we use the rule of thumb, “Your product must be remarkable enough for a complete stranger to tell their friends about. If not, then we need to work on adoption strategy before we start developing software.”

There are three avenues to overcoming ignorance of the value your product delivers:

• Advertising
• Word of Mouth
• Viral Components

I pray for the day I get a client who has the money to overcome ignorance by advertising. Advertising does work. Match.com bought their way to the front of on-line dating with banner ads on Web pages. By 2004 (9 years in) they had blitzed their way 42 million users. In 2006 they were still spending over $16 million a year to stay there. On the other hand, for early stage start-ups, ads are most useful if you can target them towards your beachhead market.

Word of Mouth is where our “remarkable” rule comes in. A personal recommendation from a trusted friend is worth 10,000 banner ad impressions. So why not invest the same money in making your product noteworthy with smartly chosen features and excellent in-app communication?

And what would make a user recommend your product? Ask them. Ask them directly, or ask about their pain points. Ask them about their problems and their joys. It seems scary and time consuming to go out and talk to a bunch of ignorant users. What if they give me a bunch of nonsense answers? Just compare this cost to the cost of developing a business that doesn’t get adoption. Reference WebVan at $800 Million or Optimark (my experience) at over $300 million.

Viral components are the holy grail of all marketing. I can’t tell you how to make a viral video, but I can advise you on adding viral components to software. Everything fun is better when you share it.

Let’s ask some questions to make your product more viral

• What parts of your product will benefit from the network effect?
• What transactions, social or commerce, can be integrated?
• What rewards do people get from sharing?
• Is it easy for people to share?
• Is it super easy, drop dead and fall off a log easy, for people to share with your products?
• Do you recognize people for sharing?
• Does your product communicate the rewards of sharing?

All these questions and their related development efforts can make a stand alone product a viral product.

Overcoming Selfish

We have come full circle to our Product Adoption Formula. Deliver the rewards on the first use, or Mom’s gonna find another app to spend her time with. What rewards are we talking about?

Gamifcation experts manage rewards in two specific categories and we should review these complete inventories every time we are developing a product concept:

Extrinsic Rewards: The “carrot”, useful for getting people to complete a single task, such as filling out a registration form. Discounts fall into this category. Group-on has gotten millions of people to jump through hoops for the extrinsic rewards of discounts. Unfortunately extrinsic rewards are fleeting, and Groupon has proven to be vulnerable to any other web site offering similar or better discounts. What have you done for me lately Groupon?

Intrinsic Rewards: Our heart is where we feel intrinsic rewards. While extrinsic rewards are subject to rational evaluation, Intrinsic Rewards reach us sometimes without our knowledge. Studies of the Facebook user experience have likened it to a drug fix. Facebook reminds us that we are loved and have people who care about us. Facebook is not in danger of losing its 500MM users to the next social network to come along.

Extrinsic Rewards

• Discounts
• Points & Stars
• Achievement Levels
• Access – Special Reports “Lose Belly Fat in 5 Minutes”
• Extra Time – a free ship in the Asteriods game
• Tools & Bling – A faster prettier car in a racing game

Intrinsic Rewards

• Belonging
• Mastery
• Love
• Autonomy
• Intellectual
• Challenge
• Sharing & Helping

To close out on overcoming the challenge of self interest, I will quote a fictional expert, 1960’s ad man and messiah of motivation, Don Draper:

Does your product do all it can to bring it’s user to that place on the highway? We work with clients to maximize every opportunity for their product to deliver the intrinsic and extrinsic rewards in a manner that engages them long enough to approach the place where “You are Okay”

Getting Adopted

To summarize, getting adopted is no mystery, Lean Business gurus have turned the process into a science. Dozens of books show us every step of the path to adoption.

Unfortunately, as entrepreneurs, our urgency to create is often so great that we rush to market with products that nobody else cares about. The urgency to make money is so great in Silicon Valley that venture capital firms invest in companies that have a greater than 90% failure rate. Thank goodness for the one in 10 that turns into Facebook or Groupon.

To ignore the advice above is like buying a lottery ticket, except that your lottery ticket will cost you tens of thousands of dollars and 3 years of your life.

Instead, take your time. Do your homework on customers and their motivations. Improve your product. Measure your success. Repeat the process until you retire.

I realized most of these observations before the invention of Lean Business, so my vocabulary will be different. Yet many of the concepts are the same. I hope that hearing it one more time from a different perspective will help you pursue more rewarding software projects. See our reading list for more resources on Lean Business and Customer Development.