Growth – The Business of Social Games and Casino

Building a strategy around doing the opposite

One of the most important issues any business founder or leader must tackle is how they are going to differentiate their offering. Everyone in your industry is trying to build a better mousetrap, counting on doing the same is not a wise move. Your competitors are looking at ways to be more efficient. They are looking at offering new features customers want. They are looking at pricing strategies that will give them an advantage. It’s the height of arrogance to think you are going to succeed along these attributes by being smarter or more creative, there are a lot of very smart people at your competitors.

Part of the answer in addressing this situation is to pursue a Blue Ocean strategy, which I have written about several times. The core of Blue Ocean Strategy is that rather than trying to win against entrenched competitors you find and target uncontested market space where the competition is irrelevant. Red oceans are a known market space with many competitors where you fight for market share. In red oceans, it is all about beat the competition and exploiting existing demand. Blue oceans is an unknown market with few competitors where you are creating market share.

Another, or complementary, way to approach building a competitive advantage outside the red ocean is by doing the opposite. A blog post by Growth strategy legend Brian Balfour, Doing the Opposite, highlights the opportunity with this approach. As Balfour writes, “categories tend to converge on value props, features, messaging, and even design over time. It’s why every SaaS website looks exactly the same. This means you need to reinvent yourself on a consistent cycle.”

As sectors mature, it leaves opportunities for doing the opposite. Balfour points out “[w]hen a category converges, there tends to be an audience looking for something completely different. One of many ways to find this open space is to ask what the opposite is….”

Finding the opposite

To address this opportunity, there are two steps. First, you should list the primary characteristics and elements currently in the category. Then ask yourself (or your team), what would an offering look like if we did the exact opposite of each of these characteristics. It could be pricing, target market, marketing creative, key features, look and feel, platform, etc.

From this analysis, determine if there is an opportunity to penetrate a different market that current companies are not appealing to. Balfour uses the example of a gym. While most of the companies in the space were promoting “X-minute abs,” there was an opportunity to focus on experienced professionals at a high price point who did not like inflated claims (i.e. look like Chris Hemsworth in three weeks).

Applications in social casino and iGaming

Doing the opposite is a tremendous opportunity for both social casino and real money gaming companies. The space is largely defined with all competitors competing in almost exactly the same manner. They increase the number of slot machines, improve in-product events, and add in some progression and social features. While the space has grown, in part a shift away from land-based gaming due to Coronavirus, it has not appealed to “adjacent users.” By looking at ways to do the opposite, a company can find a much less competitive space with a potentially huge untapped market.

Key takeaways

A powerful way to find a competitive advantage is to do the opposite of what other companies in the industry are doing. Mature industries tend to converge, creating an opportunity to appeal to customers who do not like the homogenous offerings.
To uncover the opportunity, first list the primary characteristics and elements currently in the category and then ask yourself what would an offering look like if we did the exact opposite.
This strategy represents a particularly appealing opportunity in the social casino and real money gaming spaces, where the offering has largely converged.

Adjacent User Theory Shows How to Supercharge Your Game’s Growth

We are all constantly looking at ways to grow our game or app like Facebook or Twitter or Fortnite, so where better to start looking than Instagram. An article by Bengaly Kaba, The Adjacent User Theory, shows the methodology he used at Instagram to reignite its mega-growth. Kaba joined Instragram in 2016 and was instrumental in helping it grow from about 400 million users to over 1 billion.

Kaba credits his success to Adjacent User Theory, where potential users (adjacent users) are aware of the product, maybe tried it, but are not engaged customers. The app’s positioning or too many barriers in the early user experience often drive the lack of traction with these customers. In Kaba’s situation, the 400 million active users of Instagram represented instances where they found product-market fit but also missed over 600 million potential customers who either did not understand Instagram or how it would fit into their lives. According to Kaba, “our insight was that it is critical for growth teams to be continually defining who the adjacent user is, to understand why they are struggling, to build empathy for the adjacent user, and ultimately to solve their problems.”

Solving for the adjacent user

If you have a successful game or product, you almost certainly have a good understanding of your customers (or else you would not be successful). Essentially by definition, you do not have the same understanding of adjacent or future users, or else they would already be customers. Also, your future audience evolves over time, so what adjacent users are not getting now from your game might be different from what keeps your product appealing outside its core in six or twelve months.

To solve for the adjacent users, either your product team or a satellite of your product team needs to focus on these potential customers. Kaba writes, “[w]ithout a team dedicated to understanding, advocating, and building for your next set of users, you end up never expanding your audience. This stalls growth, and the product never reaches the level you aspire it to…. You can think about your product as a series of circles. Each of these circles is defined by the primary user states that someone could be in. For example Power, Core, Casual, Signed Up, Visitor. Each one of these circles have users that are “in orbit” around it. These users have an equal or greater chance they drift off into space rather than crossing the threshold to the next state. There is something preventing them from getting over the hump and transitioning into the next state. These are your adjacent users and the goal is to identify who they are and understand their reasons struggling to adopt. As you solve for them, you push the edge of the circle out to capture more of that audience and grow.”

Slack represents a good example of the power of adjacent users, according to Kaba. Slack has five user states — not signed up, signed up, casual, core free and monetized — and will lose potential customers at the transition between each of these five states. By understanding why people drop off between states before becoming monetized, Slack can make product changes that moves these adjacent users from non-customers to engaged customers.

Why companies are not focusing on adjacent users

While it seems obvious that converting adjacent users is critical for growth, many companies miss this opportunity. Kaba identifies three reasons for this problem

Focusing on power users. It is natural to focus your development efforts on your VIPs, especially in gaming where a very small percent of your players drive most of the revenue. Thus, product development is geared to giving these players more of what they want, rather than bringing more customers into the tent.
Personas. Many companies build personas (a fictional character created to represent a player type that might use a game) to determine who they are solving for. The mistake with this approach is that personas are usually created based on existing players, do not change as customers evolve, not based on relative usage/contribution and are too broad to be actionable.
The home run swing. Product teams often look for the bold beat feature that will have a dramatic impact rather than a series of changes. Kaba writes, “they get bogged down by trying to establish product-market fit for a new set of users and never fulfill the potential of their current product-market fit.”

How to solve for adjacent users

There are several ways to mitigate the above issues and appeal to adjacent users. To overcome the bias of VIPs, product teams need to cross a “cognitive threshold” and understand the experience of non-VIP customers as well as non-customers. This includes your team putting aside their personal biases if they are using the product, they are not building it for themselves but building for adjacent users.

To avoid having your product team focus on the huge wins, Kaba writes that they must “[r]emember…adjacent users are the users who are struggling to adopt your product today. Non-adjacent users could literally be everyone else in the entire world. Sure, non-adjacent users might be a larger market, but the barriers to their adoption are also dramatically higher. Companies that try to go too big too soon and often, skip the next obvious steps and fail to solve their current adoption problems.”

Identifying and defining your adjacent users

Once you understand the value of adjacent users and how to build for them, you need to find them. You need to look at cohort decay, keeping in mind the different circles or user states for your game. You need to look at these variables (ie. registering to purchasing) and identify the decline in each cohort. That declines represents the adjacent users.

You then need to build a theory on who they are and why they are struggling or not converting. You also need to realize you will not have perfect visibility into the answer. Kaba describes the process, “is to lay out multiple hypotheses of who the adjacent users are, choose which one to focus on strategically, force your team to look at the product through their lens, experiment and talk to customers to validate and learn, then update the landscape to make your next choice. I like to think about it as a snowball. You know very little at first, but as the snowball turns you collect more information about the adjacent user, which helps you collect more snow (users).”

It is also important to gain a deep understanding of your current users. If you find that your current users are predominantly, male, 35-50 years old and from the northeast in the US, you can then look at each of these attributes to find adjacent users. For example, maybe you are losing women. Maybe you are not appealing to 50+. Maybe users from the Midwest are not connecting.

Once you have hypothesis on your current users you can create multiple hypothesis of adjacent users. Kaba recommends, “starting with a bottoms-up analysis of your data. You do not need to spend weeks talking to users to get a sense for who your adjacent user is. Look at what is happening on the edges of these states in the data. The data will help you identify places in the product that people are dropping off. This is the starting point to help you develop hypotheses about why different segments of users are dropping off.”

Understand the why

Once you have identified your adjacent users, you need to understand why they are dropping off. To achieve this knowledge, your product team needs to empathize with the adjacent users. This is usually a challenge as they often think like your VIPs and current users and find it difficult to put themselves in the heads of people who do not like their game or product. There are three ways, though, to overcome this problem:

Be the adjacent user. Your product team needs to be experiencing your game in the conditions and settings that the adjacent user is experiencing. Some examples are new user flows, empty states, and product states that require different levels of play.
Watch the adjacent user. This is done by usability testing. It is best to do this in the adjacent users environment, as focus groups and in-office usage creates artificial conditions.
Talk to the adjacent user. Once you have identified adjacent users, ask them why they are trying to use your product, what jobs they are trying to solve, and what other games they play or have tried.

Prioritizing adjacent users

Once you understand your adjacent users and have identified what they need from your game or product, you need to prioritize. You cannot solve all of their issues at once, instead you need to focus on creating the most long-term value for your company. You want to do it in the correct order or sequence so that your efforts build on each other.

First, the adjacent users you should approach are ones different on only one or two attributes. You will only have to make limited changes or additions to your product to appeal to them.

Second, they should align with your strategy. Will the changes you have to make to appeal to this segment help you achieve your long-term strategy and vision for the product. You cannot please everybody always and trying to do so could potentially take away from what is making your game successful.

Third, start with adjacent users already in your funnel, customers you are losing, rather than trying to appeal to a completely new segment.

Not a one time exercise

Once you have identified and made product improvements to appeal to your adjacent users, do not proclaim mission accomplished, as the pool of adjacent users is constantly evolving. Efforts to build for one segment will identify new segments. These efforts will also bring in new adjacent users who you can then convert. Finally, these efforts will create a new or enhanced value proposition, which means that both current and adjacent users will have a new equation in deciding whether to engage. You will then want to adjust based on how they react.

Key takeaways

Adjacent users represent a great opportunity for growth. These are potential players (adjacent users) are aware of the product, maybe tried it, but are not engaged customers
You solve for these players by looking at different states of your product (i.e. registration, play, purchase) and seeing who drops off at each of these states, then understand why these potential customers are dropping off.
You can make your product attractive by putting yourself in the place of the adjacent user, watching them use your game or product and talking to them.

Lifetime Value Part 29: Increasing Retention

I have written many times about LTV (customer lifetime value) being the lifeblood for a successful business, as a new customer has to have a higher LTV than the cost of acquiring the customer, and how retention is the biggest driver of LTV. Given the importance of retention, a recent article by Google’s Adam Carpenter, Why the first ten minutes are crucial if you want to keep players coming back , provides great guidance on what to measure and then improve to have the most impact on improving retention.

Retaining new installs is arguably the most important driver for whether your product succeeds or fails. As Carpenter says, “retention is the primary metric, since if you can retain your new players, you can always figure out how to make money. If you can’t retain any players, you have no ability to make money.”

The metric to focus on is your day 2 retention (D2). According to Google’s data, median day 2 retention (number of users active on the day after they installed your game divided by the number of installs in your cohort) is 38 percent, while exceeding 46 percent puts your product in the top quartile (3/4 of all products would be doing worse than you if hit this target). Conversely, if your D2 is 22 percent, then 78 percent of the players you pay to acquire do not come back the next day. It is very hard to justify marketing spend if 78 percent is wasted.

What you should be looking at

While the amount of time a player spends in your game after they install it is important, the critical factor is the first ten minutes. If you divide Carpenter’s data by performance, the strongest games (top quartile) average Day 2 retention of 52 percent, with 22 percent returning the next day with virtually no gameplay the first day and then seeing D2 steadily increase with each successive minute played (see chart below). The second quartile has a similar curve but starts at a lower point. The key, though, is the impact from the first ten minutes.

The first ten minutes

In Carpenter’s analysis, performance is driven by how quickly in the first ten minutes you lose players. For games in the top quartile, retention starts out good and steadily improves. In the second quartile, retention is essentially flat across the first minute and a half, and then begins to increase steadily. In the third quartile, retention is largely flat for the first four minutes, then increases but more slowly than highly performing games. In the lowest quartile, retention declines in the first two minutes and does not start to improve until the fifth minute.

These early patterns have a strong impact on players. The worst apps lose 46 percent of their new installs by the fifth minute and this number increases to 58 percent by minute ten (so in less than ten minutes you have less than half the players you have spent money acquiring). The top games, however, only lose 17 percent of players by the fifth minute and 24 percent within ten minutes (retaining more than twice as many players as the lowest group).

How to improve your situation

Once you understand the importance of the first ten minutes, you need to focus on improving this performance. Carpenter explain this as avoiding retention flats and gorges. “The first pattern is called the ‘Flats’. This anti-pattern shows largely flat retention for up to 10 minutes, with the percentages only rising meaningfully after the 5th to 10th minute. The second is the ‘Gorge’, whereby retention appears to drop minute by minute for the first five minutes or so, and then begins to rise again.”

Once you review your data, you can understand if you are suffering flats or gorges. To alter the curves, you can then:

Improve loading times. Evaluate your loading times, keeping in mind new players are particularly sensitive to long loading times (they are have not yet decided they want to wait). In my experience, even a fraction of a second will surprisingly have a bigger impact than many sexy features.
Avoid large secondary download. You may improve loading times by creating a long secondary download but the impact can be equally damaging. Players, particularly those on a poor wireless connection, may abandon your game.
Make the lobby intuitive. Allow players to find quickly the action (and the action they want) in the game. If you are using a tutorial, ensure a smooth transition from the tutorial to where your player wants to go.
Enhance or eliminate the tutorial. Speaking of tutorials, they are largely a reason to leave a game; rather than enjoying the product customers are being sent to school. See if you really need a tutorial and, if you do, how you can make it more fun.
Do not overload player with promotions. Your goal on D1 is to get your player back on D2, monetization is a bonus on top of this goal. If the player returns, you will have many opportunities to monetize them. Do not sacrifice D2 retention by distracting players with sales and offers, have them focus on enjoying the game. I prefer to have none or at most one monetization promotion on day one.

By focusing on a quick, fun experience, you are more likely to get your customer to return on Day 2. As the Google data shows, if you get them back the next day, you will enjoy greater long-term success. By increasing this one KPI, you will experience a disproportionate positive impact on your LTV.

Key takeaways

Retention is the strongest driver of LTV and data from Google shows the most important retention KPI is the amount of players who return on day 2 after installing your game.
The strongest driver of D2 retention is how many minutes your customers stay/play within the first ten minutes of starting the app.
To improve retention between the first and second days, make the early experience faster and more fun by improving load times (while reducing secondary loading), making your lobby intuitive, and not distracting your player with a bad tutorial or promotions.

Consolidate your gains (if you have them)

While many companies and business are struggling to survive the Covid19 pandemic, some businesses and industries have been fortunate to see a boost. Mobile gaming, social casino and iGaming as well as many other online businesses (from Zoom to HouseParty to Netflix) have experienced extraordinary results due to more people being stuck at home and many land-based businesses closed. In particular, social casino companies have experienced about a 20 percent uplift in revenue (even higher in the social poker space), while many online real money casinos and poker companies have seen record revenue (including Stars Group, Evolution Gaming
and Flutter ).

If you have been fortunate enough to benefit financially (I think all of us would trade it for a return to normal and an end to the suffering people are experiencing) from the pandemic, now is the time to think about your next steps, in particular, what you need to do to lock in the gains. There are three routes lucky companies can go

1. Consolidate the gains. Many gaming companies are seeing an unprecedented number of new players and players spending at higher levels. You can take steps that when the world returns to normal you retain these incremental players and help them sustain their new monetization level.
2. Enjoy it while it lasts. The increase in users and revenue for gaming companies has largely come at little or negative (due to lower marketing expense) incremental expense, thus directly impacting net profit. Companies can use this profit to pay down debt or increase dividends to shareholders (investors, founders, etc.) and other stakeholders (i.e. employees).
3. Assume it will continue. Some companies might treat the improvement as less of a windfall but more of a new normal internally driven rather than created by the pandemic.

You probably guessed from the title of this post my recommendation is that now is the time to lock in as much of the gains as possible. This pandemic is (hopefully) a once in a lifetime event, companies that can but do not leverage their good fortune will look back in 12-18 months and deeply regret missing the opportunity to move to the next level.

While it could be tempting to pull as much of the incremental profit out of the company, especially in businesses that have struggled, it creates a short-term rush that will leave you in no better position than you were six months ago. Three years from now, five years from now, ten years from now, the utility gained by pulling out the revenue will be forgotten rather than having created a business worth multiple multiples of what it is currently worth.

In the past, I have seen people use extraordinary experiences (the financial crisis, 9/11, etc.,) as an excuse for poor performance while attributing any benefits to the underlying business. Executives may want to take credit for a 20-50 percent uplift, but just as executives at EasyJet and Virgin Australia did not suddenly become stupid overnight, it’s important to realize your product did not suddenly become great and will maintain its momentum post-pandemic.

Locking in the gains

While you can argue the gains are temporary, it is a choice rather than an eventuality. As a believer in online gaming, I am confident that with the appropriate actions you can maintain much of your current success. Brett Nowak, founder and CEO of Liquid & Grit and arguably the pre-eminent expert on the social casino space, recently pointed out that mobile and social gaming is probably the best entertainment value in the world. For $5 or $10 a month (or even zero) you can enjoy a game for tens or hundreds of hours. Compare that to the cost of going to a movie or a concert or sporting event or even buying a book and the utility of your spend is tremendous. What the pandemic has done is exposed millions of people to this incredible entertainment value.

The companies that will benefit long-term are the ones that can turn this short-term boost into a long-term behavior change for the new customers. There are two elements you need to focus on. The first is retaining your new customers, keeping them from abandoning your game when casinos open or they are no longer spending 24 hours at home. The second element is keeping your players’ monetization at the higher levels. By focusing on these two areas, you can set a new, higher, floor for your product and continue growing.

Retaining your new customers

The best way to retain the influx of players is by reinforcing to them the great entertainment they are getting so they have less desire to return to the cinema or casino. There are multiple actions you can take to retain these players:

Expose them to all that is great. Most entertainment alternatives cannot offer the breadth and depth that a game provides. If the player, however, only sees a small part of your offering, they have no idea what they are missing. Run promotions where you open for a limited time elder-play levels, slot machines that they would not normally have access to or powers and weapons normally available for senior players.
Treat them like they expect to be treated. While online gaming provides a great value, often our customer facing teams are less mature than other industries. I have written many times about the importance of creating a WOW experience for your players but with new customers who are used to WOW experiences at their casino or favorite restaurant, it is even more important. Now is the time to double down on giving a great experience, especially to the players likely to become VIPs, who may be used to red carpet VIP treatment at casinos or in other parts of their lives. Match the experience they would get if they go back to their normal haunts.
Focus on the meta-game. Social games are great at creating an environment that encourages players to come back regularly. Features like progression, daily bonuses, locking mechanics, piggy banks, etc., create incentives and habits for players to return regularly. These features often promote loss aversion in players or make it a matter of prestige to return, so focusing on building a compelling set of retention features will help prevent churn of your new players.
In-game loyalty. Now is the time to improve or add a loyalty system to your game (think airline frequent flyer program). By definition, a good loyalty program increases the loyalty of the customer. Loyalty programs increase the cost the player feels when leaving, making them less likely to churn. Loyalty programs also help form habits that make your game part of their daily activity.
Invest in marketing. Now is the best time to invest in marketing to acquire new players, even though many have cut their marketing budgets. Given the damage some industries have faced, overall advertising has decreased, thus cutting the costs most gaming companies face for new users (supply and demand). Instead of acquiring the same number of players you had planned to but at a lower cost, you can use these savings to invest in additional marketing to grow faster than you had projected.
Hire the best. While your company may come through the pandemic unscathed or better, unfortunately many others are not. This situation provides a unique opportunity to bring in talent that can take you to the next level that normally would never be available. Even if you do not have an immediate need, consider accelerating your people growth now.

Maintain customers’ monetization

While retaining players is always a challenge, maintaining monetization is much more straightforward. In addition to keeping the new users who have discovered your offering due to being locked in their homes, you want to give them a reason to keep their spend at current levels. The “secret” is giving people value. If you give your customers great entertainment for every dollar they spend, they will learn that your game is a better investment than alternatives. There are several steps you can take to reinforce this understanding

- Don’t price gouge. Some companies, especially those that consider the pandemic a short-term opportunity, are tempted to use the current situation to extract as much as possible from players. While it could boost short-term profits, it is likely to leave players less satisfied and thus more likely to revert to other options as the lockdowns ease.
- Provide more value. Rather than squeezing players, now is the time to be more generous (you can afford it with the increased revenue). Ensure that they get more hours of gameplay, more exciting virtual goods, etc., from the purchases they make now. This action will reinforce in their mind the great entertainment value your game is compared with other entertainment products.
- Conduct great promotions and giveaways. As the pandemic recedes, launch an aggressive calendar of sales promotions as well as giveaways to keep customers engaged at previous levels. Again, be generous as the goal is not to get a short-term boost but to reinforce what a great product you have and then keep these players engaged at current levels for months and years.
- Predict VIPs. Most iGaming and social game companies have learned the value of VIPs, as it drives profitability in the space. Many of your new customers who eventually would become VIPs, however, have not had time to achieve the criteria that would qualify them for VIP treatment. Loosen your criteria so that you can capture future VIPs and give them exceptional treatment that they will not want to lose. This treatment is particularly critical in the iGaming and social casino space where they will probably have a host waiting for them at their land based casino when it reopens.

It’s up to you

The current Covid19 crisis means it is not business as usual. If your business is one of the few companies actually benefitting, do not make the mistake of missing a once in a lifetime opportunity to go to the next level. Now is the time to do everything you can to retain your new customers and give them a reason to keep monetization at new levels.

Key takeaways

While most of the economy is suffering right now, some online companies, particularly in the iGaming and social gaming space, are benefiting. These lucky games need to lock in these gains rather than miss a once in a lifetime opportunity.
To consolidate gains, companies need to minimize churn from this new cohort of players and provide customers a reason to maintain their new monetization levels.
Some of the most effective ways to retain these new customers include exposing them to the full product, introducing a loyalty program, enhancing meta-features and providing great customer service.

The Reese’s Peanut Butter Cup of game monetization models

I am always on the lookout for monetization models that can augment or disrupt the gaming space and I have recently come across a hybrid one that has great potential. I think subscriptions are a great way to create recurring revenue and increased loyalty. I am also a big fan of in-game advertising, as it allows players who would not normally monetize to gain greater value from a product while delivering revenue to the creator. I also recently noted the success of hypercasual games, which has been driven by advertising.

Recent research in the streaming space highlights an intriguing opportunity for game companies. A survey of consumers with connected televisions found that 76 percent are open to see ads in exchange for free streaming services. Additionally, 64 percent of consumers say they don’t plan to add a subscription video streaming service in the next year.

There are two very important implications of this research. The first is that while traditional subscriptions are still promising, many people are reluctant to add more subscriptions to their monthly burn. While it is still too early to understand the impact of Coronavirus, people may become even more conservative with their cash flow as they have to deal with a new economic environment. Second, rather than ask people to sign up for a regular charge, they are more likely to agree to a subscription if the cost is “free,” simply watching an advertisement(s).

Opportunities

For game companies, this peanut butter cup (the combination of subscriptions and advertising) presents multiple opportunities:

Create an additional subscription stream where players deliver revenue through ads. While the amount you can generate has a lower ceiling with ads, you can still build a subscription model using ads. By relying on ads rather than purchases, you also reduce customers’ barrier to signing up so you are more likely to get high pick up rate.
Use advertising to drive a game streaming service. While Stadia, and possibly Apple Arcade, have not gained much traction with a traditional subscription model, an ad-driven purchase model might allow them to get critical mass.
Leverage ad-driven subscriptions to sell flow of regular game or content release. If you are a hypercasual publisher, an ad driven subscription model can give players access to X/month games.

Ad driven subscriptions can also be integrated into different stages of your customer lifecycle or a broader subscription model. Rather than asking people to commit before they are hooked on your product, allowing players to subscribe by watching ads the first month or the first three months lowers their risk while getting them to become a subscriber. You then convert them later in the funnel to full paying subscribers.

You can also allow players who have lapsed or churned to renew their subscription by watching an ad. Thus, if they had to cancel because of cash flow issues or if they were not getting sufficient value to cover the cost, ad-driven subscriptions are an additional way to retain some revenue from these players and keep them in your ecosystem.

Challenges

While offering an ad-driven mechanic for customers to subscribe creates many options, it also presents challenges. First, one of the great benefits of subscriptions is that it gets your customers invested in the product. This makes them more committed and engaged. If they acquire the subscription by watching an ad(s), they may not be as committed to the long-term relationship. Second, to generate sufficient subscription revenue, a customer will need to watch or be exposed to multiple ads. If they are just watching ad after ad in one sitting, the value you can deliver to advertisers will be minimal. You will need to come up with creative solutions to generate enough ad revenue to justify providing a subscription. Finally, a subscription requires regular purchases, which is how subscriptions delivers reliable revenue. It is simple to bill a player regularly for their subscription and it becomes passive activity for your customer. With advertising, they will have to proactively watch ads every time the subscription renews. One potential alternative would be showing interstitial ads or ads in another frame, rather than relying on a watch-to-earn mechanic.

Figure it out

Just because nobody before Reese’s thought of a good way to combine chocolate with peanut butter did not mean it was a bad idea. It is the same with ads and subscriptions. The companies that crack the code first for merging these two monetization models are likely to see great returns.

Key takeaways

Two of the most promising business models to grow the game industry are subscriptions and advertising, so combining the two can create a unique opportunity.
There are three ways game companies can leverage this opportunity: create an in-game subscription option that incorporates ads, use subscriptions to grow a streaming service or publish a flow of games that customers subscribe to via subs.
Challenges include generating enough subscription revenue through ads, getting customers to feel committed and figuring out a mechanic for players to renew.

The lesson that Roger Bannister taught us

Roger Bannister’s sub-4 minute mile in 1954is not only inspiring but a critical lesson for business people. Until Bannister, nobody had been able run the mile in less than 4 minutes despite recorded efforts for over 1,000 years and very serious efforts starting in 1886. Before Bannister’s feat, many argued and believed that the human body was unable to run a mile in less than 4 minutes, that it was physically impossible. It was considered the Holy Grail of sports, with media and crowds constantly looking for someone who could achieve this inhuman feat.

The lesson comes not from how Bannister achieved this apparently miraculous accomplishment, but what happened next. While nobody else had been able to break the 4-minute mark despite hundreds of years of effort, 46 days after Bannister’s feat John Landry ran the mile in 3 minutes 58 seconds. About a year later, three more runners also broke the 4-minute threshold, doing it in the same race.

The lesson

The lesson to draw from Bannister’s achievement, and what followed, is that what you consider impossible may not be. Most importantly, once you are able to achieve the impossible, it becomes the new baseline and even more is possible. The key is breaking the barrier, overcoming the impossible.

Recently, I saw a successful company break the 4-minute mile and reach a new level of performance. It hit what had for years been an impossible milestone. Breaking its personal four-minute mile increased long-term profitability by 30 percent.

The company achieved this result by focusing efforts of multiple teams to create a super-revenue day. All elements of the company designed a plan to create one huge day, the one that was formally their 4-minute mile (though they hadn’t come as close as Bannister’s competitors had). These results not only led to the highest revenue day in the company’s history, but revenue previously considered unattainable.

Like the 4-minute mile, though, once they had broken through this barrier, they themselves were amazed to see that they surpassed that goal repeatedly, without the need even of special initiatives. Now what was once a ceiling is turning into a floor for the company.

Do the impossible, and then more

What the 4-minute mile and this company’s success show is that there is tremendous value in tackling what looks to be impossible. This ceiling could be 100,000 daily average users or a 5 percent conversion rate or a $10 million month, a goal that would impact you significantly and set your company up for a brighter future. If you find a way to overcome it, not only do you derive immediate value but more importantly you can change your long-term trajectory.

Key takeaways

In 1954, Roger Bannister ran the first sub-4-minute mile, a goal many had considered humanly impossible for hundreds of years.
Once Bannister broke the barrier, somebody else broke it less than two months later and then three runners achieved the feat in the same race about a year later.
In business, too, once you find a way to overcome an impossible barrier you are likely to find that you can do it repeatedly and create a new floor.

Why you are probably under allocating resources to retention

One issue I see repeatedly with game and gaming companies, and many other industries, is under-indexing their investment in retention versus acquisition and reactivation. While there is no evil plot to neglect retention, it is the most challenging part of the life cycle to determine ROI on investments.

With acquisition marketing, most successful companies have visibility into the CPI (or CPA depending on how you look at your UA efforts) they are paying and the LTV for those players. By comparing CPI and LTV, there is a clear ROI. Companies can then allocate resources to acquisition marketing as long as the ROI is above their needed return on capital. Also, as you are probably spending thousands or even millions of dollars per month on acquisition, optimizing that spend justifies additional resources (analytics, tools, etc.) as you want to get the most out of your spend.

Reactivation is similarly easy to quantify. You look at the cost of getting the player back and then how much they are likely to spend once they are back. Not only is it easy to calculate the ROI on reactivation spend, you can justify the investment because the revenue will be higher than the investment. No executive can argue with spending $1 to get $2. The only caveat with reactivation spend is ensuring you are not spending to bring back customers who would return regardless.

While retention is your most important KPI, it often does not get the same level of love because the ROI is much less obvious. You are not adding a user and revenue. You are not bringing back a lost customer. Retention, however, warrants more investment than every other part of the business combined.

Retention spend avoids spending $1 for $0.40

Every dollar you spend to retain existing players impacts your recurring player base. With acquisition marketing, even the best apps and games are lucky to see a 40 percent D1 rate (40 percent of customers who download the app return the next day). Thus, for every dollar you spend on a new player, only $0.40 or less is contributing to your product’s performance the next day. Given that a normal (though still good) D7 retention rate is 10 percent (1 out of 10 newly acquired players play on the seven days after downloading your game), you effectively only have $0.10 left from that $1 of spend still working for you.

Conversely, virtually every dollar spent on existing players is contributing to your product for days or months. A contest that encourages people to play more touches all your players and could impact their behavior over their lifetime. You are not losing 60 percent or 90 percent even before you can do a thorough analysis.

Retention spend can make the cost of acquisition less painful

The first subject everyone talks about at conferences (and even importantly at the bar during conferences) is how expensive it has become to acquire customers. Yet despite the money and resources spent on acquiring the player, the same effort is not made keeping and delighting the player.

Many marketing teams feel their job is done once the player is in the game (or has made a purchase) and thus their efforts are focused on acquisition. The true value to the company, though, is turning those new customers into a loyal player. While it is not solely marketing’s responsibility, it is a critical part of the equation. If marketing acquires a player for $5, they then spend $7.50 and churn, it may look like (and is) a marketing success as they have achieved a 150% ROAS (return on ad spend). However, if they could use retention marketing to have that player make $7.50 purchases every month for a year, the impact is 12X better than the acquisition spend. Moreover, the cost of getting that player to become a repeat customer is almost certainly not 12 times the acquisition cost, but a fraction of that cost. Thus the ROI is significantly higher.

Retention is not just about the product

At this point, many of my marketing friends are probably saying (or thinking) that retention is the responsibility of the product team, they have already done their job. Product and marketing are no longer two distinct functions. Companies like Facebook and Uber have blitzscaled because their products were also their acquisition channels (hence the term growth hacking), thus these products were the marketing. Conversely, product can only touch players when they are in the product (though they can build systems to bring customers back). Marketing, however, can impact players any time. The player may not have been in the game a week but you can still impact them by email, text, Facebook, Snapchat, television, blimp, etc. Retention is largely about triggers, reminding customers to use a product again, and marketing must work with product to ensure customers stay engaged.

A bird in the hand…

Optimal investment is not only about maximizing return but also managing risk. There is much less risk dealing with a known entity (an existing player) than an unknown. If you do take more risk, you should only do it if you will have higher return. A risk-based approach to allocating your resources also suggests that retention is a neglected investment vehicle. With new user acquisition, the new player is a question mark. They may fit your existing LTV curve or they might over/under perform. There is little information to base your estimate (largely the performance of other players acquired from the same or similar channel).

With an existing player, it is easier to estimate the impact of additional retention marketing. You have data on what they play, how often they play, what incentives impact behavior, etc. Based on this data, you can estimate accurately the return one additional marketing dollar will bring. These estimates will track much closer to actual results than new acquisition, especially with new channels, thus reducing the volatility of your return on marketing spend.

Retailers get it

While game companies, and many tech companies, disproportionally emphasize acquisition, retailers have learned over hundreds of years that their marketing budget is better optimized for retention. Most of the advertising and promotions from retailers are focused on bringing back existing customers, not getting them into the store for the first time. JC Penney or Target or Curry’s are not focusing their marketing on getting new customers, they are focused on driving behavior from existing customers. Sales are designed to optimize repeat purchasers and getting existing customers to spend more, very few are built to bring in new customers.

Amazon Prime is arguably the biggest factor making Amazon one of the most valuable companies in the world. Prime, however, does not get many people to try Amazon. Instead it converts existing customers into ones who spend more and are more loyal. The dynamics of retail are not that different than gaming, it is just that they have learned that there is a higher return in devoting resources to existing customers.

What to do

The value of retention marketing does not diminish the importance of acquisition or reactivation but you should design your structure so it is not neglected.

Build your organization so that retention marketing is on an equal level. The head of retention should not report to acquisition. You should not have an EVP or SVP leading acquisition and a Manager leading retention. On the org chart, they need to be at comparable levels.
Ensure you have KPIs in place measuring retention, what gets measured gets done. Virtually any company is monitoring daily its acquisition spend, CPI (or CPA) and ROAS. You need to be both measuring and reviewing regularly the success and growth that your retention team is driving.
Rebalance your resources to ensure that you are optimizing your retention programs. Not only should you be running programs, but you need sufficient resources to build the campaigns, create the marketing collateral and analytic resources to review and optimize. Do not skimp on these resources for the quick thrill of acquisition or reactivation.
As well as physical resources, you need to deploy sufficient budget to retention for long-term success. Start with a basic smell test. If you are spending $1 million a month on acquisition and your retention budget is $25k, probably something wrong. Try to align all your marketing spend with the understanding that retention drives significant value at lower risk.

If you do not focus on retaining players, any success will be short lived. To become great, your entire company needs to focus on keeping your customers.

Key takeaways

While the primary focus of most game companies is user acquisition, retention marketing is often neglected. Retention marketing, however, is more important to a company’s prolonged success.
For every dollar spent on acquisition marketing, at least $0.60 is lost the next day only 40 percent (at best) of players come back. Conversely, all dollars spent on retention marketing impact customers over their lifetime in your game.
You should ensure your structure is built on optimizing retention as well as acquisition and allocate resources (both people and money) to reflect the immense opportunity with retention marketing.

Lifetime Value Part 27: How to know if your advertising is working (with benchmarks)

The key to any successful product, particularly a mobile game, is for your CPI (cost per install) to be less than your LTV (lifetime value of a customer). As long as it costs less to acquire a new customer than they are worth, you have a healthy business. Once the cost of acquiring a new customer exceeds the value of that customer, your product or company will languish and eventually die.

The challenge of computing LTV

While virtually nobody would argue the logic behind using LTV to drive your marketing, implementing it is not always easy. Many companies do not have a reliable LTV formula for all of their products or a data scientist (or team) to create one. New products also do not have enough data to calculate LTV.

Even when you have a reliable LTV calculation for your product, every cohort of user will have a different LTV. Players acquired one month will not have the same LTV as those acquired a different month. Players acquired through one marketing channel will not have the same LTV as players acquired through a different channel. Same can be said for country, marketing creative, platform and many other factors.

You will also not have enough data early in a campaign to calculate LTV reliably. However, you do not want to spend on unprofitable campaigns and you want to support good campaigns with more resources.

The answer to measuring campaigns reliably

The best proxy for understanding if your CPI is below your LTV is ROAS (return on ad spend). ROAS measures how much revenue a certain cohort of users generates over the first X days of acquiring those players (with X normally measured after 3, 7 and 30 days).

While it sounds overly simplistic, short term ROAS tracks very closely with your long-term return, thus whether CPI < LTV. You can be very certain if your 30 day ROAS is performing ahead of target, your acquisition is profitable. Moreover, I have found that even 3 day ROAS is very indicative of long term profitably. I have not yet come across a situation where ROAS has indicated a campaign is profitable for it to falter when analyzed after months or years. I am now very comfortable relying on 3 day and 7 day ROAS metrics to decide whether to continue, increase or decrease spend for a product, specific vendor or campaign.

Benchmarks to target

Without benchmarks, ROAS numbers would be useless. You need to know what numbers to target. As I have been in the social casino space for about five years, I am only comfortable providing social casino benchmarks. When evaluating a product or campaign, I target a 3 day ROAS of 5 percent, 7 day ROAS of 10 percent and 30 day ROAS of 20 percent. For other genres, such as hyper-casual (where you generate most of your return early), your targets would be very different so understand your space before making decisions (actually before launching a product).

What to do if you are missing your benchmarks

As with all metrics, ROAS provides guidance, not black and white answers. If your ROAS is slightly below the benchmarks, you may not have a problem, it could be noise. If one agency is outperforming another by 1 or 2 percent, again it may not be indicative, it may be luck (one caught an extra VIP). Conversely, if you are missing even by a little, it could be indicative of a deeper issue. A small miss also means that you should adjust conservatively until you see your 30 day ROAS numbers.

If performance is significantly behind ROAS benchmarks, then you need to find the cause. If it is across the board (all campaigns), then your product has issues. You either need to address these issues and improve retention or monetization (the key drivers of LTV and return) or not invest in the product. If the performance is worse on a particular platform, you need to dive deeper into your technical performance on that platform versus other platforms and how the user experience (CX) differs on the underperforming platform. If the underperformance is with a partner or channel, you should adjust your spend to focus where you have a stronger ROAS.

Key takeaways

While the success of any product or company long term is ensuring its cost for acquiring a customer is lower than the value of the customer, it is difficult to calculate in the early days of a product or marketing campaign. ROAS (return on ad spend) based on the first 3, 7 or 30 days of a campaign provides a good proxy for whether the campaign is successful.
In the social casino space (other genres may be different), the benchmark target ROAS is a 3 day ROAS of 5 percent, a 7 day ROAS of 10 percent and a 30-day ROAS of 20 percent.
If your ROAS is underperforming significantly, you need to evaluate if you should continue investing in the product overall or in the specific marketing channels, while adjusting your marketing mix to optimize ROAS.

Blitzscaling or how to lightning scale your business

Reid Hoffman’s and Chris Yeh’s recent book (Hoffman was the founder of LinkedIn), Blitzscaling, provides great analysis on how companies like Google, Uber, Amazon have scaled so massively. As Hoffman wrote, “when you scale at speed, you can capture the market quickly and also outmaneuver potentially global competition. Given the parallels with military and sports strategies, we can call this blitzscaling. Literally: lightning scaling.”

Hoffman explains the key principles, which he refers to as Blitzscaling, in companies going from scrappy start up to corporate giants. These principles are critical if you are building a business that you plan to grow significantly or if you are an investor. It is also valuable to understand the concept of blitzscaling to understand the tech ecosystem.

The key difference between blitzscaling and traditionally business building is how quickly and large it becomes: blitz from the German WW2 phrase Blitzkrieg (lightning warfare) and scaling, which means growth. The principles below show how the Amazons and Googles grew into the biggest companies in the world (keep in mind not everyone is going to enjoy success and it is a very risky course). The principles, however, are important to understand not only if you are trying to blitzscale but also if you are in a market where a competitor is taking this approach.

Proportional growth

The first key to blitzscaling is proportional growth. Not only is blitzscaling focused on very rapid growth but also proportional, and therefore sustainable. By proportional, Hoffman means that you are expanding across your business, not just one element. For example, a lemonade stand that increases the quantity of lemonade it has available to sell 100X is not blitzscaling but if it gets more cups as well as lemonade and sets up 100 locations across the city it is. Amazon blitzscaled when it went from $5.1MM in rev and 151 people in 1996 to revenue of $1.64 BN and 7,600 people in 1999.

Be Aggressive and Fast

The second key is that you need to be aggressive and fast. Blitzscaling involves throwing caution to the wind; embracing risk is a defining component. While a traditional company would grow, secure its position, then grow further, consolidate again, then commit to growing again, etc., blitzscaling companies act differently. Growth is the only priority, logistics and securing the growth they have achieved are not important. Profitability is not critical or even relevant.

Blitzscaling companies focus on speed over efficiency. Blitzscaling is why taxi companies tremble when a peer to peer ridesharing company like Uber rolls into town. The blitzscaling company does not care about short term profitability, it is focused entirely on growth. The logic is that first scaler advantage goes to the company that is first to scale up and dominate its business ecosystem. Once a company scales, it is much more difficult for competitors to then enter the space or raise money to compete. Traditional competitors might refer to this tactic as dumb money, since the blitzscaler is not focusing on growth, it is a logical strategy for building a dominant, huge player.

Focus on growth factors

The next key to blitzscaling is focusing on four growth factors, all blitzscaling companies seek to maximize: network effects, market size, distribution and high gross margins. Network effects make first mover advantage much more important. If you look at Facebook or Uber, the network effect creates huge barriers to entry once an entrant has grown very large. In Facebook’s case, no consumer would want to be part of a different social network that did not have their friends and family. In Uber’s case, the number of riders generates many drivers (because of the revenue opportunity for drivers), which generates more riders because of the availability of Uber rides. A late entrant cannot come into a space with high network effects because they will not have enough liquidity to compete.

The second growth factor critical to blitzscaling is market size. A company’s market needs to be sizable, otherwise there just will not be enough investment money to fuel growth. Nobody will fund a blitzscaling company in a market where they cannot scale (eg. toys for pet lions).

The third growth factor is distribution. You may have a great product and large well-defined market but getting it to customers on a massive scale is not trivial. Distributing a product on such a scale can happen in two ways. First, you can use a distribution network that already exists, from UPS to Apple’s AppStore. The second way is viral distribution. You infect one customer, they infect more customers, and so forth and so on.

Gross margins are the final key growth factor. Gross margins are the money you take in once costs are covered, revenue minus the costs of the actual goods (COGs). The find the percentage, Gross margin/COGS=%, and a high percentage makes it easier to attract the investment needed to scale. Investors want to put money into opportunities where they can enjoy huge returns, and if the margins are high then potential returns are huge at scale. The importance of gross margin is why tech companies, who enjoy a very high gross margin since the marginal cost of a digital product is often negligible, dominate the list of firms who have blitzscaled.

Product/market fit and operational scalability

The greater the product fits with the market need, the higher opportunity for blitzscaling. Immediately achieving perfect product/market fit is not likely. To improve the fit and allow for blitzscaling, most companies must adjust their product to make it better suit the market’s needs. This is another area that benefits tech companies. It is easier for a tech company to be nimble regarding product/market fit; fiddling by bringing out a new version of software or testing out a new app feature requires less infrastructure than redoing a physical commodity. You need to edit code, you do not need to buy new machinery.

Operational scalability, or lack thereof, can facilitate or halt scaling. As you grow, you need to deliver more of your product. If you cannot, you are missing out on potential sales and allowing a competitor to fulfil this demand. While less of an issue for tech and mobile companies, going from having 100,000 daily unique users to 10,000,000 still has crashed many a product. Sometimes it is impossible to recover from those crashes, as customers have already abandoned your company.

Manage the growth

The challenges of scaling are complex – and they become increasingly complex as a company grows. You need a plan, operational control and a business plan for long term growth. Growing a business also increases its complexity, which can create issues with management philosophy, organizational hierarchy and company culture. These questions are especially challenging for a blitzscaling company, since it has to answer them continually (and re-evaluate) in the midst of rapid, massive growth.

Leverage existing Blitzscaling patterns

Companies are much likely to blitzscale successfully if they follow the patterns set by other companies that have already blitzscaled. Hoffman identifies seven such patterns:

Sell a product that is purely digital. For example, consider an extra, purchasable outfit, or skin, for a character in a video game. Since it only exists virtually, a skin costs practically nothing to make and sell. This means gross margins of nearly 100 percent. Purely digital are a very lucrative line of business for many tech companies, especially in the mobile game industry.
Go digital even with a physical product. Amazon invested in physical products but created a powerful digital-management system.
The SaaS (software as a service) model, selling software using a subscription model.
Leveraging the power of platforms. If you can establish your product or service as the standard platform for buying and selling products, you stand to capture a large share of total revenue (for example, Amazon makes more revenue from commissions and fees on its marketplace than the physical goods it sells as a retailer).
Take advantage of online marketplaces. These are a specific type of platform – platforms that not only bring buyers and sellers together, but also let them set their own prices through the market forces of supply and demand, ie. AirBnb and eBay.
The sixth pattern involves tapping into the eyeball capturing power of online content-sharing feeds, like Twitter or Facebooks’ timelines. As feeds are effective at captivating people’s attention, they are thus very attractive to advertisers, who will pay premium prices to insert their ads and sponsored content into addictive streams of information and entertainment.
Advertising is the final pattern, which is to offer your product or service for free and try to make money in some other way.

These seven patterns represent how the most successful blitzscaling companies built their empires.

Becoming the next blitzscaling company

To become the next Amazon and Google, you need an outsized ambition and tolerance for taking big risks in the hope of a big payoff. The patterns above can help you achieve this ambitious goal.. Embracing uncertainty and risk while prioritizing speed over efficiency, taking advantage of four growth factors and navigating growth limiters can all set a company up for rapid and massive expansion that will be sustainable in the future. With a clear vision, blitzscaling can help a business dominate an ecosystem.

Key takeaways

Blitzscaling is how companies like Google, Amazon and Uber have grown massive incredibly fast. When you scale at speed, you can capture the market quickly and outmaneuver potentially global competition. Given the parallels with military and sports strategies, this process is called blitzscaling: lightning scaling.”
Blitzscaling involves throwing caution to the wind; blitzscaling companies focus on speed over efficiency.
Blitzscaling companies focus on optimizing four growth factors: network effects, market size, distribution and high gross margins.

Think of Non-Customers First If You Want to Grow

I have been a consistent advocate of Blue Ocean strategy for years and a blog post by the Blue Ocean Team shows how you can grow your business by focusing on non-customers. Rather than fighting with your competitors to split up the existing pie, by thinking about non-customers you have greater growth potential. The blog post shows three types of non-customers and by understanding them you can tailor your product, new products or marketing to meet their needs. Below are the three groups of non-customers and my thoughts on their relevance to the social casino industry.

Non-customers who occasionally purchase or play

The first group of non-customers who represent a potential market are those who sit on the edge of the market, they purchase minimally your industry’s offerings but are always looking and quick to move to an alternative. The Blue Ocean Team uses the Pret A Manger chainas an example, as they appealed to people who reluctantly bought fast food but were looking for an alternative.

The social casino ecosystem includes many of these non-customers. These include gamers who are ready to skip to another genre (hypercasual, match-3, etc) if they see an appealing ad or the 90 plus percent of players who will play but not monetize. There are first-tier noncustomers waiting to be swayed in every industry.

Non-customers who refuse to become customers

The second group of non-customers is people who know an industry exists but have rejected it. As the Blue Ocean Team writes, “they have consciously thought about and considered your offering and then rejected it. It might be because another offering meets their needs better, or it could be that they simply can’t afford your offering. A second-tier noncustomer will compare your offering with another offering, weighing the pros and cons of each….The fact that second-tier noncustomers considered your industry means that you are far closer to possibly capturing them than you realize. So you need to find out why second-tier noncustomers refuse to use the products or services of your industry.”

In the social casino space, there are three types of these non-customers. The first is real money casino players (either land based or online) who have decided to not to play a free to play offering. They could have passed because they are only playing for economic reasons or the games offered are not what they prefer. The second is male casino players who may have rejected social casino because they consider them too “pink.” The third group is people who have tried social slot games but did not like the slot mechanic.

Non-customers who have not considered your industry

This category of non-customers has never considered your industry as an option. These non-customers have not been targeted ever by any company in your industry. This group is important to consider as it represents the largest potential market to penetrate (by definition it is everyone else). Existing companies in your industry assume these peoples needs are satisfied better by other industries.

In the social casino space, these are people who do not know or care that social slots games exist. It can be gamblers, gamers (other genres) or even people who have not played a mobile game.

What non-customers mean for social casino

Non-customers are particularly important to social casino as the ecosystem has been growing consistently but through better monetization rather than an increase in customers. If the industry is going to continue growing or if you want to gain market share, appealing to non-customers is the best option. First, you can tailor a product appeal to people who play but do not monetize or play rarely. Second, you can build a product for people who have churned, tried social casino games but left. Finally, you can build a social casino product for people who the industry has never targeted.

While the successful companies will come up with concepts internally and not rely on this blog to provide the answers, the key will be creating social casino products that do not simply replicate the existing games. That means looking at mechanics other than slots. Is also means creating an environment that is not targeting 40+ women. To successfully turn non-customers into customers, the parameters of the products also must shift.

Key takeaways

While many companies look at their competitors and try to grow by building a better product for existing customers, the biggest opportunity exists in appealing to non-customers.
There are three types of non-customers: those who occasionally purchase or play, those who have rejected the current offerings and those who have not considered your industry.
If social casino is going to continue growing or if you want to gain market share, appealing to non-customers is the best option. First, you can tailor a product appeal to people who play but do not monetize or play rarely. Second, you can build a product for people who have churned, tried social casino games but left. Finally, you can build a social casino product for people who the industry has never targeted.

Finding the opposite

Applications in social casino and iGaming

Key takeaways

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Solving for the adjacent user

Why companies are not focusing on adjacent users

How to solve for adjacent users

Identifying and defining your adjacent users

Understand the why

Prioritizing adjacent users

Not a one time exercise

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What you should be looking at

The first ten minutes

How to improve your situation

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Locking in the gains

Retaining your new customers

Maintain customers’ monetization

It’s up to you

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Opportunities

Challenges

Figure it out

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The lesson

Do the impossible, and then more

Key takeaways

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Retention spend avoids spending $1 for $0.40

Retention spend can make the cost of acquisition less painful

Retention is not just about the product

A bird in the hand…

Retailers get it

What to do

Key takeaways

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The challenge of computing LTV

The answer to measuring campaigns reliably

Benchmarks to target

What to do if you are missing your benchmarks

Key takeaways

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Proportional growth

Be Aggressive and Fast

Focus on growth factors

Product/market fit and operational scalability

Manage the growth

Leverage existing Blitzscaling patterns

Becoming the next blitzscaling company

Key takeaways

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Non-customers who occasionally purchase or play

Non-customers who refuse to become customers

Non-customers who have not considered your industry

What non-customers mean for social casino

Key takeaways

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