Update Lecture06.md

lingchuanzhou · Mar 7, 2015 · 40d5117 · 40d5117
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 Schultz: Yes that’s it, retention. Retention is the single most important thing for growth. Now we have an awesome growth team at Facebook and I’m super proud to work in it, but the truth of the matter is, we have a fantastic product. Getting to work on growth of Facebook is a massive privilege because we are promoting something that everyone in the world really wants to use, which is absolutely incredible. If we can get people on, and get them ramped up, they stick on Facebook.
 
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 So many times, I got to advise multiple startups. My favorite was working with Airbnb, but I’ve worked with Coursera, I’ve worked with other ones that haven’t done as well as those guys. But the one thing that’s true, over and over again is, if you look at this curve, ‘percent monthly active’ versus ‘number of days from acquisition’, if you end up with a retention curve that is asymptotic to a line parallel to the X-axis, you have a viable business and you have product market fit for some subset of market. But most of the companies that you see fly up, we’ve talked about packing and virality and all of this stuff, their retention curve slopes down toward the axis, and in the end, intercepts the X-axis.
 
 Now when I show this job to people, they say that’s all well and good, you had a million people a day in terms of growth, when you started the growth team at Facebook, or ‘you were at 50 million users, you had a lot of people join your site so you had a ton of data to do this.’ We used the same methodology for our B2B growth , getting people to sign-up for services advertisements, we used this to understand how much growth we were going to have in that market as well. And at that point when I joined Facebook, the product was three days old. And within 90 days of the product launching, we were able to use this technique to figure out what the one year value of an advertiser was, and we predicted it for the first year to 97%. So I think it’s very important to look at your retention curve.