Graphs for product metrics
If you are building a product there is a high possibility that you will see one of the following metric graphs. If you see one then you can pre-empt what is happening with your product rather than being a worrier, like me.
Tl/DR
Prefer watching over reading. Watch the class on graphs for product metrics.
This blog is part of a 4 part series on product metrics.
Blog 1: Principles of product metrics
Blog 2: Thinking about lead indicators instead of lag indicators
Blog 3: Structure for product metrics
Blog 4: Graphs for product metrics
Graph 1 — Camel hump
The first graph, that I call as the camel hump is often observed during the initial launch of a product or a feature.
A — I call this the promotion line. Not the product promotion but the product manager promotion line :) At this point, every product manager feels that he or she should be promoted. Imagine, a product has just been launched and there is hockey stick growth. Every product manager at this point has been rewarded with hypothesis validations and all the assumptions have come true. This is when PMs start hallucinating about an impending promotion.
B— The first inflexion point also called the local maxima is the point when some early adopters try the product until the usage stabilizes. This maxima is when the initial excitement and adoption for your product reaches its max.
C — I call this the panic line. This is when every product manager feels that uncontrolled urge to stop the fall of product usage data but can’t. As a product manager, it can cause panic because you are unable to understand why the product adoption is dropping significantly. You also don’t know until when will this drop continue.
D— I call this the stabilization point. At this point, the tire tickers have churned and the ones who are still using your product are those who are here to stay. From here on, your product will have a steady growth.
Graph 2 — Multiple S curves
Each product has its S curve. Each feature has its S curves too.
A product’s S curve is a cumulation of these multiple S curves of each feature.
Here, “A” is the camel hump when the product was launched. B and C represent user growth due to incremental features.
“D” is the blue ocean feature that may take the product to a new orbit.
Just for perspective, think of “A” as the launch of bing. Then consider “D” as the launch of ChatGPT on bing.
Graph 3 — Dinosaur back
The Dinosaur back plots performance against time. This curve is important since as product managers, when you release a new product or a feature, you need to understand that the team may choose to take certain debt. Performance is one such debt.
Point A: It could be performance debt, reliability debt, or any other engineering debt. It should be acceptable as a product manager to take this debt when you are doing an early release of your product. Here your intention should be to get your hypothesis validated, get early feedback from customers, instead of shining the product inside out and ensuring every nook and corner of debt is paid off.
Point B: At the same it is important that as a product manager to give time to your engineering to pay off this debt at a later time. At this time, the feature velocity may not be very high however the technical debt is an important tax to be paid.
Point C: As you invest in more features, you may incur this debt again. Therefore, as a product manager you should account for this debt reduction by the engineering team on a timely basis.
Graph 4 — Double camel hump
Marketing events at times can boost your visitors, engagement, and adoption numbers. So if you see a repeated camel hump, this may be due to external factors and not incremental feature release.
These external factors could be marketing events, change of product launch vehicle, or simply an advertising campaign worked well. As a product manager account for these events in product adoption.
When you see multiple of these camel humps, you can rest assured that the campaigns helping your product grow are working well.
At the same time, if you see that your product growth would have continued regardless of the events then you know that burning cash on such events may not be the best use of your time and money.
Graph 5 — Revenue graph
Most product owners and product managers view revenue independent of product maturity. This is a mistake. Your revenue should be super imposed on your product adoption and engagement graphs.
In the above curve, (1) represents the conventional product S curve over time depicting product adoption. Curve (2) marks the profit or revenue that the product is making over time.
If you look at the profit graph independent of adoption, you will only operate in binaries. That means you are either profit making or not. However, when you project profit with adoption, you will be able to better ascertain your projections for profitability.
During product development and introduction phases, it is high possibility that you are making losses. The earliest you flip profitability during introduction or growth phase, the better it could be for your business model.
Typically during growth stage, your commerce and billing engines should start running.
As your product matures and declines, the profitability may also reduce. This time could be in months, years or even decades.
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