2 minute read / Sep 9, 2013 /
The One Best Metric for Your Startup to Maximize
It’s not engagement. Engagement, (time-on-site, page views, number of sessions per day) is the wrong concept because it doesn’t apply to most products. The best metric is share of habit.
Engagement fails the majority of products as the best metric to optimize because maximizing engagement/time-on-site contradicts the product’s purpose. Google relentlessly whittles down the time it takes for users to complete a search. Sparrow reduces email client use. Online travel agents and e-commerce companies minimize conversion funnel duration. Expensify slashes time spent filing expenses.
For other products, engagement is a good metric. Facebook and Instagram and the New York Times and YouTube and other media sites do maximize time on site. The more time on site a user spends the greater the number of ad impressions and hence revenue.
But all these products seek to maximize share of habit.
Google, Expedia, Sparrow, YouTube, Expensify, Facebook and Instagram share a goal to win 100% share of the instances their users search, book travel, email, watch videos, file expenses, share with friends, and take beautiful photographs. They all aim to maximize share of habit.
Focusing on share of habit puts the user first. It aligns long term incentives between the product and the user because the right feature set will bring users back time and again to the product. Also, winning share of habit means understanding the environment of the user - what competition for time and attention does my user face - and creating a superior experience.
As a product manager for a new product or a founder of a new startup, I would set my sights on winning share of habit. After all, every new feature, every marketing initiative, every sales pitch is meant to increase habit, stickiness, commitment, attachment to the product. That’s what winning is, winning share of habit.