My Framework for Evaluating Early-Stage Consumer Companies

Why do people come? Why do people stay? Why do people share? Why do people pay?

1. Why do people come?

What gets users on the platform? Can this be distilled down to a single sentence? Who is your (precise) customer, and what do they want?

2. Why do people stay?

This question is all about user retention. In consumer businesses, frequency and time spent are key. What are the features or actions that receive the most user engagement? What are the switching costs? Is there lock-in?

3. Why do people share?

Is there a propensity to share the product or platform via social media or word of mouth? A key concept here is virality, when a product spreads from one user to another through direct customer to customer contact.

4. Why do people pay?

Consumer businesses typically fall under one of three categories:

  • Platforms: usually free UGC media/content platforms with indirect monetization (think Pinterest, Twitch)
  • Products & Services: consumers pay for something the company produces (think Peloton, Spotify)

Investing @BessemerVP & studying Symbolic Systems @Stanford. Previously @ChapterOne. Follow me @gaby_goldberg.

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