The hierarchy of engagement | Sarah Tavel (Benchmark, Greylock, Pinterest)

Sarah’s background

• Sarah Tavel is a partner at Benchmark, focusing on investing in consumer and marketplace startups
• She was the first product manager at Pinterest and has a background in product and growth

Framework 1: The Hierarchy of Engagement

• Tavel introduces two frameworks for building a startup: the Hierarchy of Engagement for customer businesses and the Hierarchy of Marketplaces for marketplace businesses
• The Hierarchy of Engagement focuses on the criticality of engagement over vanity metrics
• The framework emerged from Tavel's experience at Pinterest, where she led the discovery team and focused on increasing engagement

Level 1: Core action

• Social products have a core action that forms the foundation of the product, such as friending on Facebook, pinning on Pinterest, or sending a snap on Snapchat
• The completion of this core action signifies an engaged user, and other actions are secondary to this core action
• It is crucial to pick the right action that scales to enough users, and the new user experience (NUX) should lead to this core action
• Founders should focus on the levers to improve and think holistically when designing and optimizing the product

Level 2: Retention (00:10:33)

• It's crucial to ensure that users stick around after completing the core action
• Products should improve with increased usage, creating more value for users
• Examples of products that become more retentive with use include Pinterest and Evernote

Level 3: Self-perpetuation (00:14:00)

• The goal is to make the product self-perpetuating, converting user activity into a better product experience
• Utilizing network effects and growth and re-engagement loops can help in achieving self-perpetuation
• Examples are provided of products like Pinterest and Evernote in relation to self-perpetuation challenges

The importance of focus

• Focus is crucial for building successful companies
• To achieve mass-market success, consumer products need to spread organically with low acquisition costs
• TikTok spent over $1 billion on paid ads to reach its current user base
• New social products struggle to compete with dominant forces like TikTok and Instagram

The challenge of anonymity

• Anonymity hinders the accruing benefits and mounting losses that drive engagement
• Anonymity often leads to bad behavior, causing products to not persist without persistent identity

Advice for founders who want to increase retention

• Measuring and tracking cohorts is essential for understanding user behavior and retention
• Focusing on a specific geography can help create a high retention product

What founders often get wrong

• Founders often overload their product at the beginning, diffusing user attention from the core actions
• Failing to focus on the activation moment and the core action can be a significant mistake for founders

Examples of Core Actions

• Pinterest's core action was pinning something, leading to high return rates
• YouTube's core action evolved from watching videos to subscribing
• The core action should serve both sides of the network, creators, and viewers

Finding your North Star Metric

• The North Star metric of a company tends to be the core user action, like Pinterest's weekly active pinners and YouTube's subscribers

Who should use the Hierarchy of Engagement framework

• Consumer founders, product leaders in companies can prioritize the roadmap using the framework

The Hierarchy of Marketplaces Framework

• Aimed at marketplace founders prioritizing important aspects for scaling the marketplace
• It challenges the focus on just growing GMV and emphasizes building enduring value through market focus and customer proposition.