💫 Heartcore Consumer Insights
Welcome to the 91rst edition of Heartcore Consumer Insights. Curated with 🖤 every two weeks by the Heartcore Team.
If you missed the past newsletters, you can catch up here. Now, let’s dive in!
Learnings & patterns from founders and leaders at successful B2C subscription companies (Calm, Spotify, Noom, Duolingo, Grammarly).
Pattern #1: obsession with efficiency: the most common thread across every company was an obsession with efficiency - staying small, keeping costs down, and getting profitable. They all stayed lean until they found strong PMF and, in many cases, far beyond that. Nikhil Jhunjhnuwala (VP of Growth at Noom) mentions:
Pattern #2: strong alignment between product strategy and acquisition strategy: surviving in B2C is all about finding an efficient (aka cheap) growth channel. All of these teams found a way to grow very efficiently - either through word of mouth or highly optimized paid ads:
Pattern #3: a magical, sticky product through rapid iteration and endless optimization. The bar for a sticky consumer subscription app is high. People get bored and quickly look for the next shiny thing. Every one of these apps did something unique to keep people coming back. For Duolingo:
Simple four-part framework potentially helpful to assess consumer businesses:
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? Related: Is Your Product a Vitamin or Painkiller?
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? When looking at cohort retention, is the absolute size of the cohort growing? How does behavior change as cohorts grow? Do cohorts stabilize, and if so, when? Do newer cohorts perform the same, better, or worse than older ones? Related: What is good retention?
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.
Why do people pay? Consumer businesses typically fall under one of three categories: (a) Marketplaces: facilitating transactions between buyers and sellers, (b) Platforms: usually free UGC media/content platforms with indirect monetization (c) Products & Services: consumers pay for something the company produces. How will economics change over time? What drives differentiation — price, service, brand? Is it sustainable and defensible?
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12 Great Copywriting Examples
How to Launch a Customer Referral Program in 6 Steps
How to retain your best customers
Curated growth flywheel
Virtual Beings: a new internet-native medium for storytelling
BlitzFail: How Not to Go Off the Rails
Why Crypto Gaming Is Not The Future
🇪🇺 Notable European early-stage Consumer rounds
🇺🇸 Notable US early-stage Consumer rounds
🔭 Notable later stage Consumer rounds
🍭 Notable Consumer Exits
Heartcore Consumer Insights is a weekly newsletter covering notable consumer rounds and exits and top content in the B2C space.