the power of customer misbehavior - akf partners
DESCRIPTION
The Power of Customer Misbehavior explores the idea that customer misuse of features is the key to viral growth through product development based on this information. This book introduces the concept of self-identity as a motivator for participation in social networks as well as product purchases. Additionally, The Power of Customer Misbehavior covers several technological features such as the user interface and page load time and their impact on user adoption and retention. http://akfpartners.com/books/the-power-of-customer-misbehaviorTRANSCRIPT
ABBOTT, KEEVEN & FISHER PARTNERS
PARTNERS IN HYPER GROWTH
1
The Power of
Customer Misbehavior
Mike Fisher
Marty Abbott
ABBOTT, KEEVEN & FISHER PARTNERS
PARTNERS IN HYPER GROWTH
About Us
2
Marty Abbott
Tom Keeven
Mike Fisher
ABBOTT, KEEVEN & FISHER PARTNERS
PARTNERS IN HYPER GROWTH
Books
3
ABBOTT, KEEVEN & FISHER PARTNERS
PARTNERS IN HYPER GROWTH
Other Publications
4
ABBOTT, KEEVEN & FISHER PARTNERS
PARTNERS IN HYPER GROWTH
Our Business – 10 Countries & Growing
5
ABBOTT, KEEVEN & FISHER PARTNERS
PARTNERS IN HYPER GROWTH
The Power of Customer Misbehavior
6
ABBOTT, KEEVEN & FISHER PARTNERS
PARTNERS IN HYPER GROWTH
Growth is Good!
7
For Profit Businesses:
• Higher Valuations
• Greater Access to Capital
• Larger Profits
• Higher Employment
• Better Able to Contribute Socially
Not For Profit Businesses:
• Greater Social Impact
• Better Network Effects
• Better Access to Funding
ABBOTT, KEEVEN & FISHER PARTNERS
PARTNERS IN HYPER GROWTH
Viral Growth is
Better!
© AKF PARTNERS 2013
Viral Coefficient (Cv) = Fan Out * Conversion Rate
Viral Growth = (Cv * Retention)Frequency
Cv > 1
In order to achieve viral
growth the viral coefficient
must be greater than 1
Viral Growth with Low
Retention is still better than
non-viral growth.
8
ABBOTT, KEEVEN & FISHER PARTNERS
PARTNERS IN HYPER GROWTH
Comparison of Social Networks
9
Founded by Jonathan Abrams and Chris Emmanuel in 2002 in Mountain View, CA
Live in March 2003, adopted by 3 million users within months
Total funding $48.5M
Pages eventually took up to 40 seconds to load
Hired four CEOs in three years
In 2009 sold for $26.4 million MOL
Founded by Mark Zuckerberg and fellow Harvard students in 2004
Initially restricted to college students (.edu email)
500 million users by 2010
Only $40.7M invested by 2007, eventual total investment $1.49B
IPO raised $16B valued the company at over $104B
ABBOTT, KEEVEN & FISHER PARTNERS
PARTNERS IN HYPER GROWTH
Social Networking for Pets
10
“These are fakesters, they're not people. This is
supposed to be for actual people, so let's get
them off of there.” – Jonathan Adams
By 2012, there were an estimated 22.9 million
misclassified accounts including millions created
for pets (Kelly 2012). A Facebook executive
observed, “I still run across occasional people
profiles that are actually of their cats or dogs or
something like that.”
ABBOTT, KEEVEN & FISHER PARTNERS
PARTNERS IN HYPER GROWTH
College Parties
11
Friends
Groups
Events
ABBOTT, KEEVEN & FISHER PARTNERS
PARTNERS IN HYPER GROWTH
12
How Do You Achieve
and Sustain
Viral Growth?
ABBOTT, KEEVEN & FISHER PARTNERS
PARTNERS IN HYPER GROWTH
Technology
Adoption S-Curve
© AKF PARTNERS 2013
13
Introduced
Neal Gross and Bryce Ryan
Uses
Explained adoption of hybrid
corn seed as a social process
ABBOTT, KEEVEN & FISHER PARTNERS
PARTNERS IN HYPER GROWTH
Technology
Adoption Lifecycle
© AKF PARTNERS 2013
Introduced
Rogers, Beel and Bohen in 1957
paper Validity of the concept of
stages in the adoption process
Uses
Provided psychographic profiles
of adopters at each stage.
14
ABBOTT, KEEVEN & FISHER PARTNERS
PARTNERS IN HYPER GROWTH
Technology
Acceptance Model
© AKF PARTNERS 2013
Perceived
Usefulness
Perceived
Ease of
Use
Attitude
Toward
Using
Behavioral
Intention
to Use
Actual
System
Use
Introduced
Fred Davis 1989 MIS Quarterly
paper Perceived Usefulness,
Perceived Ease of Use, and User
Acceptance of Information
Technology
Uses
Single user / single technologies
like ERP, CSM, and email
15
ABBOTT, KEEVEN & FISHER PARTNERS
PARTNERS IN HYPER GROWTH
Viral Growth
Model
© AKF PARTNERS 2013
TAM
Combine TAM with Viral
Growth factors
Perceived Ease of Use and
Perceived Usefulness
Positively Impact Viral GrowthGrowth
Perceived
Usefulness
Perceived
Ease of
Use
Fan Out
Retention
+
++
16
ABBOTT, KEEVEN & FISHER PARTNERS
PARTNERS IN HYPER GROWTH
Users Help “Create Value”
Co-Creation Co-Production
“the process through which inputs used to
produce a good or service are contributed
by individuals” (Ostrum, 1975)
Creating social media accounts for pets
Adding hashtags to find updates
Using a product in new, innovative and
unforeseen ways
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“the act of interacting, creating content
or applications by at least two people”
(Trogemann and Pelt, 2006).
The contributions of users to Wikipedia
are typical examples of co-creation.
Posting status updates, pictures, sharing
links, etc. through user generated content
(UGC)
ABBOTT, KEEVEN & FISHER PARTNERS
PARTNERS IN HYPER GROWTH
The Virtuous Cycle of Misbehavior:
Co-Creation Leads to Co-Production
18
Use/
Co-Create
Misbehavior/
Co-Produce
ABBOTT, KEEVEN & FISHER PARTNERS
PARTNERS IN HYPER GROWTH
Virtuous
Misbehavior
and
Collaboration
Growth
Misbehavior
Drives Growth
© AKF PARTNERS 2013
Perceived
Usefulness
Perceived
Ease of
Use
Fan Out
Retention
Co-
Creation
+
+
+
19
+
Co-
Production
ABBOTT, KEEVEN & FISHER PARTNERS
PARTNERS IN HYPER GROWTH
Virtuous
Misbehavior
and
Collaboration
Growth
But What Drives
Misbehavior?
Perceived
Usefulness and…
© AKF PARTNERS 2013
Perceived
Usefulness
Perceived
Ease of
Use
Fan Out
Retention
Co-
Creation
+
+
+
20
+
Co-
Production
ABBOTT, KEEVEN & FISHER PARTNERS
PARTNERS IN HYPER GROWTH
Virtuous
Misbehavior
and
Collaboration
Growth
© AKF PARTNERS 2013
Perceived
Usefulness
Perceived
Ease of
Use
Fan Out
Retention
Co-
Creation
+
+
+
21
+
Co-
Production
Self-Identity“Even those who deny any interest in
how others view them actually do
care, if only by making sure that
everyone else understands that they
don't. The way we dress and behave,
the material objects we possess,
jewelry and watches, cars and
homes, all are public expressions of
our selves” - Donald Norman,
Emotional Design (2007)
Self Identity
Voyeurism
Exhibitionism
ABBOTT, KEEVEN & FISHER PARTNERS
PARTNERS IN HYPER GROWTH
Simplified Model with Feedback Loops
22
Identity
MisbehaviorUsefulness
Ease of
Use
Growth
ABBOTT, KEEVEN & FISHER PARTNERS
PARTNERS IN HYPER GROWTH
23
Be Open to Misbehavior