Choosing Product Features


Today I came across the question of how to best choose product features throughout the course of development of a product.

Of course, there are several approaches that you can take to figure this out. In fact, I’d love to hear feedback from others below. At the onset of determining your feature set, it helps to have a good understanding of what your users want. However, please keep in-mind that the features your business chooses to develop must also fit the long-term vision for your product. If you stay short-sighted for too long (i.e. fulfill immediate needs of your customers), you may fall into a habit of being reactive as opposed to proactive in developing new and innovative feature sets.

One method that I like to use is taking a holistic view of each feature that would be under consideration for development and figure out its net business value ROI, where [Return = (measured) Business Value] and [Investment = Development Time spent (on a given feature)]:

Step 1. Approximate how long it would take to develop/integrate each feature into your product.

Step 2. Measure the Business Value that each feature would add. Business Value could be things like increase user retention, increase monetization, increase viral or other distribution, increase engagement or any other metric that you find adds value to your business. You may need to approximate a business value here. Choose a scale that works for your metrics and try to stick to it.

Step 3. Work our your ROI = (Business Value / Development Time) for each feature. You will begin to see which features are going to be big payoffs in the long-run.

Most recently, I have been using SCRUM processes to manage products. Do you use SCRUM? If so, what tweaks have you made to the SCRUM process that you’ve found improved teamwork, decreased iteration time and led to better product-wide planning?

Twitter Update from Chirp


Twitter held their annual developer conference called Chirp on April 14-15th, and it gathered quite a crowd. I recently came across a great summary of Twitter’s latest stats, collected and published by Ben Lorica, a Senior Analyst in the Research Group at O’Reilly Media. Thanks Ben!

Here are some of the key take-aways:

1. Number of registered users: 105,779,710 (1,500% growth over the last three years.)

2. Number of new sign-ups per day: ~ 300,000 (More recently, 60% of new accounts were from outside the U.S.)

3. Number of new tweets per day: 55 million

4. Number of unique daily visitors to the site twitter.com: ~ 180 million. (That’s actually dwarfed by the traffic that flows through twitter’s API — 75% of traffic is through the API.)

5. Number of API requests per day: 3 billion

6. Number of registered apps: 100,000 (from 50,000 in Dec/2009)

7. Number of search queries per day: 600 milion

8. Twitter’s instance, of their recently open-sourced graph database (FlockDB), has 13 billion edges and handles 100,000 reads per second.

9. Number of servers: “… in the hundreds”

10. BlackBerry’s just released twitter app accounted for 7% of new sign-ups over the last few days

11. A NY Times story gets tweeted every 4 seconds.

Virtual Goods: Market, Types, User Psychology


Virtual Goods have begun to penetrate social networks like Facebook and mobile applications like Tap Tap Revenge (by Tapulous) and I Am T-Pain (by Smule). They have spread like wildfire, with game developers itching to better understand the economics of virtual goods and the psychology of gamers. This post will explore the rapid market growth, types of virtual goods, user psychology and steps to launching virtual goods in your application or game.

Market Growth

The estimated market size has gone from a nascent space in 2008 to approximately $500 million (Aug. 2009; Source: Viximo) to over $1 billion by end 2009 (Oct. 2009; VentureBeat) only 2 months later. If you are at all surprised by this vast market size, you should know that the Asian virtual goods market is seven times bigger than US (estimated at $7 billion for 2009).

Zynga, one of the leading social games companies, launched a game called Farmville in June 2009, and has already become the most popular game application on Facebook with 62.4 million active users as of October 29, 2009 and will easily break through $150 million in 2009 revenue.

Types of Virtual Goods

Developers are very creative. So far, the types of virtual goods can largely be placed into 2 buckets:

  1. Decorative Goods: Do not affect game statistics / game play (e.g. avatars)
  2. Functional Goods: Affect game statistics / game play (e.g. Farmville tractors — did you know users bought 800,000 of them yesterday)

Since functional goods affect game play activities, game developers should give users the ability to either earn these items/goods through game play or provide a shortcut in acquiring them with a virtual currency. Functional goods can be managed to have low or high value price points; generally, the value of these functional goods can be set by carefully managing and understanding scarcity. Ensure to have some items that are very common (Developers: ensure to “prime the pump” by getting users familiar with using some free and low-cost items), and some that are very rare and expensive.

While A/B testing how much users will pay for items, understand that as the aggregate number of social interactions per user increases within an application, each rare item’s value will proportionately increase for those users. Another consideration while establishing demand for your virtual goods is whether or not you need a secondary market where users can sell, trade or profit from their virtual goods (See more from Bill Grosso’s presentation on Managing a Virtual Economy).

There are many reasons why a user would pay more for certain items. Let’s try to better understand game user psychology.

Psychology of Purchasing Virtual Goods

Users will buy virtual goods for many different reasons. Buying decisions will be based on a number of factors including user motivation, several forms of influence, boredom and competitiveness. If you’re a developer, think carefully about users of your applications: Why would they want to buy a virtual good within your application? What added value would they receive? Which other people would see they bought this good, and could they benefit as well? Below, I outline a number of different reasons why users choose to purchase virtual goods:

  • People are impatient (time = money) and want to advance through game play more quickly
  • People are competitive and want to get ahead (of friends, peers, the world)
  • People want to express themselves in unique ways (akin to the culture of decorating cell phones in Japan)
  • People want to feel good about themselves (donating to charity and publicizing)
  • Gifting allows people to foster and maintain existing relationships with others in an increasingly electronic world
  • Gifting allows people to create new relationships
  • People will return gifts due to the rule of reciprocation (influence), which prompts us to repay what someone has given us
  • Provenance (e.g. did a famous user own this item in the past?)
  • Branding (virtual goods branded by real-world companies)
  • Rarity (scarcity)

5 Key Steps for Launching Virtual Goods

In a presentation by Amy Jo Kim, CEO of Shufflebrain, about why and how virtual goods work, she outlined 5 steps for launching virtual goods.

  1. Create meaningful content
  2. Prime the pump with free goods or currency
  3. Create demand for premium content
  4. Offer fresh content at a range of price points
  5. Make it easy to purchase currency

There are many different companies that offer solutions to help with your virtual currency. If you’re looking for good vendors, try: PayPal, Gambit, boku, Zorg or $uperRewards.

Why are your users buying your goods? How did you generate interest or scarcity in your application? Please share your story and learnings about user psychology and buying decisions in the comments area below.

Viral Marketing Whitepaper


Viral marketing can be a huge asset to the launch and sustained growth and success of any product or business.

I am in the process of creating a whitepaper that brings in proven strategies as well as specific case studies of successful viral marketing efforts. The whitepaper will also cover more specific strategies centered around mobile App Stores and effective utilization of Facebook Connect and Facebook application pages. Lastly, it will contain a bible of social media strategies.

I kindly ask all of you to share any viral strategies that you have used to-date, along with key dates and timelines, screenshots, verbiage used in messaging, and key metrics (user growth, #downloads, etc…) achieved from the strategy.

Please leave comments below, or DM/@ me on Twitter with links to your story, my username is @jsookman. I will be tracking posts with the #UbiquitousVC hashtag, so please use it!