How To Better Understand Your Users

Full Title

How To Better Understand Your Users

Summary

This episode introduces the "dot plot" as a powerful visualization tool for understanding individual user behavior over time, moving beyond aggregate metrics. It highlights how this method reveals patterns and provides deeper insights into product usage and user value.

Key Points

• Founders often make the mistake of relying on aggregate user metrics, like DAUs or MAUs, which obscure individual user behavior and can be misleading even with growth.
• The "dot plot" is a two-dimensional grid where rows represent individual users and columns represent time periods, with dots indicating specific valuable user actions.
• This visualization allows founders to identify patterns in user engagement, such as weekday vs. weekend usage or retention issues, which are invisible in aggregate data.
• Dot plots can be enhanced by using different symbols for various actions or encoding user states (e.g., device type, demographics) and can be sorted to analyze specific user segments.
• The technique is scalable, applicable from a few users to billions, and was famously used by PayPal to identify fraudulent transactions by having humans visually scan for anomalies.
• For B2B products, dot plots can reveal issues like low seat activation or sporadic usage by key users, indicating a risk of churn even with significant contracts.
• Key mistakes to avoid are charting the wrong event (e.g., app opens instead of value-creating actions) and using too wide a time period (e.g., weeks instead of days) which reduces granularity.
• Dot plots are most effective when used in conjunction with cohort retention curves, with dot plots providing the "how" of user behavior to complement the "if" from retention data.

Conclusion

Dot plots offer a granular and insightful way to understand how individual users interact with a product, going beyond surface-level aggregate metrics.

This visualization method can uncover critical patterns, identify potential issues, and inform product development and user engagement strategies for both B2C and B2B companies.

By focusing on value-creating user actions and using appropriate time granularity, dot plots can become a startup's primary dashboard for understanding its user base.

Discussion Topics

• How can understanding individual user behavior, rather than just aggregate metrics, fundamentally change a product's development trajectory?
• What are the most critical user actions to track in a dot plot for different types of products (e.g., SaaS, e-commerce, content platforms)?
• Beyond identifying problems, what proactive product strategies can be directly informed by the patterns revealed in detailed user usage visualizations like dot plots?

Key Terms

DAU

Daily Active Users, a metric counting unique users who interact with a product on a given day.

MAU

Monthly Active Users, a metric counting unique users who interact with a product within a 30-day period.

Cohort retention curves

A visualization showing how a group of users (a cohort) acquired during a specific time frame continues to use a product over time.

Timeline