📰 The Car Bundle

13 | Think: MVP

Stop building minimum viable products, users won’t adopt them. Instead build more valuable products, I wrote a full post on this topic – the minimum viable product trap!

Still not convinced, here are some examples –

Bing is a good search engine (if you have not tried it lately, you should). Still we continue to user Google regularly and did not shift. Why? Because there is nothing more valuable it has compared to Google. Outlook, is now probably as fast as Gmail and with most (of the commonly used) features that users would expect. Yet Gmail continues to lead because Outlook provides nothing more valuable than Gmail. We did not move from Dropbox to Google Drive. Same., not more valuable. While in case of WhatsApp, we all moved not just from text messaging to WhatsApp, but also dumped Facebook Chat, GTalk and many other products. Why? – because it is more valuable! Rules to Remember:

Build something of value to users, that will drive adoption of your product. Build your product for real users, not for early adopters.

There’s a lot you can criticize about cars and individual car ownership. But one criticism you shouldn’t make blindly is “Think about how much of the car you don’t use.” 

It’s true that not every driver or every trip needs the horsepower of an ICE or a top speed of 65+ MPH. Not every trip needs four seats, or even two. Not every trip needs climate control or cargo space. But it doesn’t matter, because cars are a bundle. 

A car is like cable TV. There are some features of my car that I don’t really need. And there are some that you don’t really need, either. But we both buy them anyway because both the logistics and the economics of buying all of them together are so much more compelling than if we each had to individually shop for only what we needed in a vehicle. Today, we’re going to talk about why.

Why Bundles Work Bundle economics can be tricky to understand - how is paying for stuff you don’t want a good deal?

Bundles naturally occur whenever you have a bunch of related product offerings or capabilities, and a wide range of willingness-to-pay among potential customers. If you offer each product individually, and price that product in order to maximize revenue, the revenue-maximizing strategy can often be to charge a high price, and monetize a relatively small number of customers. It’s revenue-maximizing, but it’s not ideal: a lot of people miss out on the product entirely (they’re "deadweight loss” to the seller, as they generate zero revenue) and the people who do buy the product are paying close to the limit of what they’d be willing to pay (so there’s not much consumer surplus).

If you bundle the products together, on the other hand, a funny kind of economic magic happens. Everyone ends up paying an approximately fair price for the one product that they were going to buy no matter what, and then gets a very good deal on everything else. The consumer surplus from all of the different products you bundle together adds up faster than the cost of the bundle - the “free lunch” comes at the expense of deadweight loss. The net result is that sellers make more money, and buyers get a better deal: you pay somewhat more, but get way more, than if you were shopping individually and only bought your priorities.

Some rules of thumb for good metrics hygiene: These are some of my biggest learnings in my quest to become more and more disciplined about the tactics of good goal setting and measurement. • To assess for product-market fit, look at retention. Do not look at the sheer number of people using your product or feature (which can be skewed by things like how aggressively you promote it.) Retention best correlates with whether your product is valuable because it tells you whether people who tried it liked it enough to return and use it again. • To optimize for growth, understand your funnel. In order for people to become regular users of your product, they have to pass through a bunch of hurdles. First, they have to be aware of your product. Second, they have to be interested enough to check it out. Third, they have to convert (download an app, fill out a form, confirm e-mail, etc.) Fourth, they have to do enough within your product to understand why it might be valuable in their lives. Fifth, they have to remember to come back. At each of these steps, you will lose people. If you can track and measure what that rate of loss is, you can then start to figure out where to focus your efforts to make your funnel less leaky. • Figure out which metrics are truly important, and focus on those. It’s tempting to get into the state where you track everything (because you can), and you have a dashboard filled with numbers that all feel like they should be green. Recognize that most things don’t matter, and that only a small handful actually do. Don’t waste time talking about the unimportant stuff, and don’t sweat letting some of the less important metrics go up or down. …

In August 2022, my gamified habit tracker, Habits Garden, was making ~$200/month so I went all-in. But I’m a product-obsessed developer. I don’t like marketing.

Side-project marketing saved me: Ship free tools to promote a paid one.

For instance, I launched VisualizeHabit—a free tool to visualize the compound effect of tiny habits. I plugged Habits Garden and it brought 30,000 visitors in 2 months.

If you read 5 minutes/day for 1 year, you’ll finish 6 books

For a side project to work, I had to be good at launching. I started to make fun launch videos. People enjoyed and shared them, creating a viral loop. Each side-project grew my Twitter following and brought decent traffic.

Skit for the launch of ByeDispute

Thanks to side-project marketing and launch videos, Habits Garden reached 10,000 users in January 2023.

Users requested a mobile app. I had no idea how to code them, but I tried. After 14 days with the help of my friend Martin, Habits Garden was live on the App Store and the Play Store.

It was making $700/month. Not bad, but not worth 6 months of my life. I fell in love with the wrong product.