July 7th, 2016
Thalamus: You guys were app developers prior to Branch, and so you have a really personal understanding of the pains app developers face. What would you say are the top three to five pain points that most app developers experience today?
MM: So a little background. We are app developers, we built a consumer facing app, got featured in the App Store, and we had some pretty good growth initially to a couple of hundred thousand users in the first three months. But then after the feature died down, we realized that we needed to grow organically, so we tried multiple growth techniques: we built in user sharing; we paid some people to write about us on their blogs, did a lot of marketing emails, and that’s really where the genesis of the Branch came from — struggling with the linking and the tracking of users, and being able to take them to the appropriate place inside the app in all cases, regardless of what device, OS, OS version, browser, or channel they came from.
That’s when we realized that we really wanted to solve that core problem nobody had solved before. When it comes to what app developers are facing today, we personally talk to hundreds of apps every month, so we hear a lot.
I would say there are three main issues that app developers are always facing: growth (or discoverability), engagement and retention, and then monetization. So the monetization piece is easy if you have a product that you can monetize — maybe you run ads, maybe you sell products, and that’s something that you can solve. It’s usually baked into the business model.
The retention and engagement piece is a big one, and I’m sure we’ve all seen these charts, where you see on average 90% of your app users drop off after the first month. So you spend all this time, and these efforts trying to get people to download your app, and then almost all of them drop off and don’t stay retained. This kind of ties into this problem of all these apps being on people’s phone, and the fact that people tend to use just a few apps every month, and all the other apps are just kind of sitting there not really doing anything because retention is really hard.
But before you can even care about monetization or retention you really have to care about growth, or getting users to your app. And especially if you’re a new app developer — you build this app, you invest your life into building this and launching it, and then you put it out there, and it’s really tough to grow. You might have a great app that really is compelling for a lot of people, but if people don’t know about it, it’s very difficult to get discovered, and this is partially what Branch thinks about a lot.
Thalamus: Retention rates are below 20% for a user coming back to use the app after the first 7 days. Why do you think this is the case and are there any ways that mitigate these retention rates?
MM: I think it’s a combination of a couple of reasons. I think first it ties into how well that user was onboarded and what kind of experience they got the first time. Also, I think this kind of ties into some of the things that we do with Branch, and some of the things we help with, but we won’t talk about that too much today.
Basically somebody that downloads your app just made a commitment to you saying, “Hey, I’m going to give you my time, and download your app, and I’m going to try it out.” If they get dumped on the home screen, and then have to log in, and aren’t getting deep linked, users will just get frustrated and they leave the app. When they leave the app, they’re frustrated, and so they delete it or never come back.
At Branch, when people deep link users to content, we actually see a 2x on the retention and the engagement. And so it doubles the retention. We actually did a study across thousands of apps that proved this: what’s basically happening is people are getting a great first time experience, so they stay in the app longer. As they stay in the app longer, you capture more of their attention and they see more value in the apps, so they’re more likely to come back.
It’s crazy but true, that you can double retention just by deep linking them and giving them a good first-time user experience, which is the first piece. I think the second piece is that there are just so many apps, and a lot of people will download them even if it’s for one-time use. Let’s say you’re going to use Yelp, but you only need it your first time. You download the Yelp app, you might use it quickly, but the likelihood that you’re going to come back and use it again might be low, because you only had intention to do it that one time.
So it’s kind of this problem that there are so many apps out there, and a lot of people are pushing everything to apps. They end up with these users that download it temporarily, use it, and then maybe never use it again, and then clear it off their phone when they’re cleaning up their apps. In terms of way to mitigate it I already talked about personalizing the on-boarding experience.
Another way that’s kind of interesting is if you have a mobile web experience, you can actually consider keeping people on the mobile web a little bit instead of forcing them to the App Store right away. Then, if you see the user continue to return (say, they come back five times in a month), then you try to push them to the app store to download your app because at that point it’s clear that this person is repeatedly getting use out of your company. (Branch has a new product that does this for you, by the way).
So you might actually consider not pushing everyone to the app, and instead pushing them to the mobile web, if it makes sense — if they’re a first time user, or somebody just looking at the content for the first time.
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