#026 - PM Lessons by Meituan Co-Founder - Pt 20: Needs - How to Identify Needs?
9 mins read - product forms, iterations and needs
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How to Identify Needs?
Two questions here. The first is how to identify needs. The second is how to think about it. I'll provide a method that I think works based on my personal experience. If all the great needs have been attempted by people in the past, then we need to figure out why they didn't succeed. There are many reasons why they failed, maybe it's because of the team. That's why we need to study the successful failures - those that gained traction or even almost made it but ultimately failed.
From Personal Web Pages to Social Networks
For example, in social, Facebook is the one that reached an unprecedented scale. If we trace back the development of social networks to when the Internet was just beginning, there were many new ideas and phenomena then. One of them is personal pages (made by or for an individual), and many personal pages were pretty successful, reaching tens of thousands of visitors. (Note: There were just several millions of people online.)
Building personal pages is an industry phenomenon. What Need it reflected is hard to say. But as Fu Sheng (CEO of Cheetah Mobile) has said, phenomena are rules manifested. Even if we can't really figure out exactly what need it is, it is manifested in reality.
Personal pages developed for a while then phased out. Afterward, something called ChinaRen (founded in 1999) came out, and in the US, there's something similar called GeoCities (founded in 1994). These two web hosting services are the next iteration of personal web pages and the user base was also much larger.
(Note: Cameron’s World - A project that restores some archived GeoCities sites to their full glory. Sound on.)
Why GeoCities and ChinaRen took off? Because it was hard building personal web pages. You need to have content, technology, equipment, and money to pay for web hosting, and you can design. It's rare for an individual to satisfy all these conditions, that's why personal pages never took off. For ChinaRen, the web hosting is free (Note: under a certain web space size, like 2MB as it was for GeoCities.) and you don't need to know how to code, you just work with the modules. This led to several orders of magnitudes increase in the potential user base. Regardless of the underlying need, the barriers to entry decreased, and the ease of use increased.
However, ChinaRen failed technically. They had a hardware failure and lost the files for three hundred thousand sites. Gone was ChinaRen.
(Further Reading: An Ode to GeoCities)
Around 2000, blogs start to gain popularity. Blogs are a further iteration of web hosting services. For a personal page or GeoCities page, you visit it once to find out who or what this page is about, then that's it, you probably won't visit the page again. As a result, the site builders lost the motivation to maintain the site.
Perhaps that intoxicating feeling explains why a lot of the pages on GeoCities seemed frozen in the gestational state, their most prominent feature some kind of wacky “under construction” graphic. After the thrill of setting up the site wore off, the creators seemed to get bored of the daily work of maintaining a home page. And what was the point, anyway? After all, it quickly became obvious that setting up a Web page wasn’t a surefire way to find fame, wealth, or dates. That was especially true as more and more people came online, creating a glut of home pages. Now that everyone had one, no amount of flashing text could make your page stand out. — Slate, How GeoCities Invented the Internet
Blogs fixed the format, and encourage you to write new posts every once in a while. Posts are displayed in reverse chronological order, so that the most recent post appears first, at the top of the web page. This tells bloggers and readers that content is updated regularly. As a result, usage by writers and readers increased significantly.
The problem with blogs is that readers don't know when bloggers posted new content. Different writers post at different frequencies. At this time (2005 - 2006), RSS gained widespread use as blogs reached mainstream popularity.
Even with RSS, there is still a big problem and that is the creators and readers community was still a small segment of the population - people who have a need for cutting-edge ideas.
At this point, the industry split into two paths.
The first one is Weibo (Twitter). As data costs become cheaper and cheaper, mobiles phone come with more and more powerful cameras, and personalized recommendations become possible with machine learning, the microblogging branch gave rise to Instagram, Toutiao, and Douyin/Tiktok. (Note: Interest-based, content-centric, unidirectional follower model.)
The other branch is Facebook. (Note: social-centric, bidirectional follower model).
When we were working on Xiaonei, it was the heyday of blogging. As such, we were facing a decision on whether to build a blogging feature for Xiaonei. The decision was to build a blog-like product, but should the blog be open to everyone or just friends? If it's the former, more people will be able to see the content, and writers will have a stronger motivation to produce content. But this is an assumption to be tested.
An American site gave us inspiration. Even if you write rubbish every day, your friends would still check out your page. If you make the product to be default open, then the content creators know they're writing for the public. If it's default closed, then it's writing for friends. The content would be vastly different. Even if each piece of content may not be viewed by as many people, the friction to create content is much less, the result is more people writing and reading content on the whole. There are far more people caring about friends' gossips than the latest research findings.
At this time, there's still a big problem - you don't know when which of your friends wrote a post or uploaded new photos, so you have to click on their profile pages one by one, which is a bad user experience. As such, Facebook borrowed the RSS idea to create the News Feed. The News Feed was a milestone product for Facebook. At this step, the final form of Facebook was basically established.
From the personal pages all the way in the beginning, to web page hosting, to blogs, to Facebook and Twitter, to Instagram and Douyin/Tiktok, each wave is bigger than the last, richer and richer the content formats and more and more mainstream the users. If we see this development from the lens of Diffusion of Innovations, this diffusion is achieved through different product forms iterating across different eras, and through the iterations, covering different segments of the population.
The users for personal web pages are the Innovators. The users for web hosting services are between Innovators and Early Adopters. For blogs, even more Early Adopters. And for the subsequent Facebook, Douyin/Tiktok, Weibo, the user penetration rate got higher and higher. The nature of the information may not have changed much, but the form has changed a lot.
As the form changes and usage become more widespread, content has also become more diverse. The diversification of content is closely related to the changes in infrastructure - network speed, data costs, the prevalence of smartphones, pixels on phone cameras, phone CPU, etc.
With better infrastructure and lower barriers to creation, users can access more content, in richer formats, so the content has become more diverse. When we were using Photoshop on PCs, it's hard to image editing photos on mobile phones. When we were editing photos on mobile phones, it's hard to imagine editing videos on mobile. When we were editing videos, it's still hard to imagine beautifying live video feeds. All this is because of the change in infrastructure which allows the broader coverage of user bases.
So what need is it exactly? Today, we all can name a few needs. It's hard to pinpoint exactly what it is. The most important thing to realize is that the prevailing method of realizing needs at any point in time bottlenecks the needs being satisfied to the easiest-to-realize needs of an appropriate group of the population. On the next iteration, the realizable needs achieve a breakthrough, and the serviceable population expands.
The waves of development are accompanied by changes in understanding. For example, blogging was realized around 2000, but technologically, it was feasible since 1995, but the industry practitioners' understanding hasn't iterated to this point. Therefore, we need to understand the key elements in realizing the needs at every point in time and seize the corresponding opportunities. From this perspective, the live streaming vertical is the biggest benefactor of the 3G → 4G → 5G development.
The Iterations of Photo Albums
The desktop era of Facebook already has an album feature. The first generation of albums is paper-based. Then it's the compact discs (CD). Then the albums on PCs. And finally web-hosted photo albums. In fact, the step from PC albums to online albums was not a natural next step, because, on PC, you can already view your photos anytime you like. Putting them online runs the additional risk of the account being hacked. However, one advantage of online albums is that it's much easier to reference a picture when writing an article or sharing it with friends.
Facebook albums have a tagging people feature. When I first saw it, I was shocked. What a cool feature! The prerequisite for this iteration is the social graph in Facebook.
The next step for photo albums is mobile. Previously, you have to upload the photos somewhere after you've taken them. With mobile phones, photos can be immediately synced to an album or shared with friends. For any site with a social graph, realizing this feature is very easy. This led to a significant reduction in costs to take, upload and share photos, and subsequently, the conversation rate increased significantly and the production of visual content in social networks increased drastically. For the consumers, there is more content to see, so it's also a better experience.
Physical Constraints, Content, Product Forms
YouTube of the US is great. The YouTube of China is not Youku. Youku is corresponding to Hulu or Netflix. Bilibili is somewhat like YouTube. However, the user base of Bilibili in China today is an order of magnitude smaller than the user base of YouTube in the US. Bilibili has a DAU of 30M, YouTube's DAU is hundreds of millions to a billion. (Note: Bilibili - 61M DAUs, 223M MAUs - 1Q2021; YouTube - 122M DAUs in the US, 2B+ MAU worldwide - 2020.)
Why YouTube is so much bigger than Bilibili?
YouTube was founded in Feb 2005. At that time, much fewer people have video cameras in China than in the US, so Chinese entrepreneurs like Youku (founded in Dec 2003) or Tudou (founded in Feb 2005), tried for a while and discovered that the supply of content was too little, so they had to pivot into something like Netflix or Hulu to provide professional-generated videos.
In fact, YouTube users spend as much time on the service as Douyin or Kuaishou Users, and there is a large variety of content.
Why Douyin and Kuaishou have a different form than YouTube is because when they entered the market, the key elements have changed. Douyin and Kuaishou users use their phones to shoot. Even today, most of the videos on YouTube are shot by digital cameras. The physical constraints lead to the difference in content. Douyin and Kuaishou users shoot with their phones and due to internet speed, bandwidth, etc., they can only do short videos.
YouTube is now a Web and mobile mixed product. And the videos on Douyin and Kuaishou are now getting longer. This is to say, even with different entry points, which match with the state of infrastructure at that point in time, the two product forms may evolve in the same direction.
This is related to the previous section. When we're building products, we need to consider why a need can be satisfied in the current time window. The reasons are usually because the needs have shifted due to economic and social reasons. Or because of the advancements in technology and infrastructure, a previous infeasible need has become realizable. These two combine to become a breakthrough point for the need. You need to match with the breakthrough point to create a product. In many product decisions, you need to consider why the breakthrough happened and match your decisions with the underlying reasons.
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