Startup strategy: Why you have to demand commitment

When you give something away, such as free content on the Web, you don’t know how much your users value what you’ve given them. Not knowing how much your product is worth to your users is a problem, because great businesses constantly strive to increase the value they provide.

Can you solve this problem by tracking usage data? If people use my free product, doesn’t that prove they value it? Well, repeat usage that requires clear intent to achieve a predictable result, such as Google searches, may prove your users value your product. But impulsive usage, such as clicking on a sensationalist headline, doesn’t tell you much.

While willingness to pay is the most obvious indicator that someone values your product, there are others. For example, you can demand effort, such as forcing your users to register. This runs counter to many internet companies’ strategy of minimizing “friction”, to enable instantaneous, impulsive usage.

In Seeking Alpha, we wanted to keep our content free, but wanted to ensure our users valued it. So we forced our users to register. Our thinking was “We’re not interested in a relationship where you don’t value our product enough to register for free”.  By getting our users to register, we could also do much more for them, such as send them articles on their portfolio and provide them with compelling personalization.

So far, over 2.5 million people have registered on Seeking Alpha, over 2 million have portfolios, and over 1.7 million receive email newsletters or real time alerts, and over 100,000 people use our apps each day.

One thought on “Startup strategy: Why you have to demand commitment

  1. This is one of the most challenging decision for any development team and there’s always a big debate on what is the “right” thing to do.

    In this case, from my experience, when you let the user sign up to your product, you create an environment which leads to a better user engagement.

    In this kind of commitment, the users are committed to give the developer a better insight on the value they’re getting from the product, which leads to a better user experience in the long term.

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