The notion of retention has always interested me when it comes to new startup ideas. I’m sure there are lots of complicated definitions for that term, but to me it simply means your customers’ propensity to continue to use you app in an ongoing cadence that’s appropriate for your type of business.
One of the topics that I mentally cycle through when I hear new startup ideas is the purchase cadence of their potential customers. I don’t have any real data to back this up, but my guess is that apps with longer-than-normal usage cadence (eg “Uber for gutter cleaning”) are more difficult to grow because people just forget about your app if they aren’t thinking about it regularly. In other words, your ability to surprise & delight with a great product & brand is greatly diminished because you just aren’t touching your customers enough.
Most of the podcast references in this blog are pretty detailed thoughts on the topic because I want my readers to read my thoughts and then - for the ones that are the most interesting - I want them to hear another founder discuss this issue in the context of their own experiences.
This podcast reference is different…it was just a quick mention that caught my attention. But I wanted to blog about it because retention (otherwise known as “purchase cadence” or “ongoing engagement”) is such an important topic to early-stage startups.
In this podcast/video, this founder mentions how travel-related apps have a natural purchase cadence problem. They are used only twice per year, so the most successful travel app companies have gotten good at new customer acquisition (to offset this churn).
Like most things with startups, there are no hard-and-fast rules, but I would encourage founders with new startup ideas to consider the ongoing purchase cadence of any startup idea that they have. The more frequent the behavior, the more likely that a startup brand can stick in customers’ heads when they have that problem.
The ongoing engagement of your best users is possibly the single most important indication that you have something that could be a high-growth business.
Get Right to the Lesson
I’d recommend listening to the entire thing, but to get right to the point go to minute 42:28 of this podcast/video.
Thanks to these folks for helping us all learn faster
David Temple (@dtemple), co-founder & CEO of Hello Scout (@ScoutTravel)
This Week In Startups (@TWistartups )
Jason Calacanis (@jason)
Jacqui Deegan (@jacqKD)
Jacob Beemer (@jacobbeemer)
Please let me and others know what you think about this topic
Email me privately at email@example.com or let's discuss publicly at @davempayne.