Design instagram for small businesses.

Structure:

1.      Clarifying Questions

2.      Define the goal

3.      Users and prioritization

4.      Pain Points and Prioritization

5.      Solutions and evaluation

6.      Metrics

a.      North Star

b.     Supplementary

Clarifying questions:

·         Define Small Businesses – these are typically local mom and pop store type of businesses that heavily rely on online commerce to make sales as they may not have physical stores to set up and want to reach a broad audience by showing their wares on social media sites like FB or Instagram. – Is that accurate? – yes

·         When we say, ‘design IG for SMB’, do we want a separate app or just have a feature integrated into the current IG app? – You choose – I think it is better to have this as a feature in the main product itself because it is unlikely that users would want to switch or download an additional app just for shopping – there’s already amazon dedicated for that. – Is that ok? – sure.

·         Can I assume that this would be somewhat similar to the Marketplace app on Facebook with the distinction that we are not taking C2C (user to user) transactions and that this would need to be a registered business? – yes – that is correct

·         Small businesses can already create pages and showcase their wares on IG – what would be different about this and why are we doing this? – Users finding business pages would completely depend on their browsing history thereby reducing the reach of the SMB and requires them to spend a lot on advertising to get reach which is good in the short term but could be bad in the long term. So, to reduce the pain and have dedicated space for small businesses to showcase their products with lesser advertising required, we believe that the engagement on the platform would increase thereby eventually leading to higher revenues in the long term.

·         Great – that was going to be my next question – Based on this, we can assume that Engagement would be a key metric that we want to track (leading to long term revenue) – Yes – that is correct

·         I assume that we are going to do this across Web and App – Sure

·         I want to start by limiting this to the US geo and see how it works before thinking about expansion   - sure

·         Do we have any constraints? – Assume no.

Thank you for the clarifications – Now, knowing the narrowed scope of the problem, we can proceed to defining the goal –

Goal:

We already discussed that the goal of the feature is to get more engagement on the platform, but we want to understand how this feature ties back to the original mission for meta.
Meta’s mission is to help build community and bring the world closer together. In that sense, a feature that is designed to connect people based on a transaction (which can be viewed as common interest) ties back well to the main mission. Here, this feature allows us to connect with other users who have small businesses, and we can connect with them on purchases or other interests thereby building a sense of community.

Cool – Next, let’s talk about users.

Users:

Typically, when we think of a transaction-based feature, we consider it to be a 2-sided marketplace – Sellers and Buyers. In this case, I not only want to delve deeper into these user groups, but I want to expand it to be a 3-sided or even 4-sided marketplace.

So, we have -
1. Sellers – these are Small Businesses that use IG and other social media platforms to showcase and sell products.

2. Buyers – these are users who are on IG not for the primary purpose of shopping but are interested in buying things they find value in, if it shows up for them in their search or otherwise (while scrolling)

3. Advertisers – Brands that spend money on advertising their products and reaching out to customer cohorts. Small Businesses can also be advertisers but let’s put them under bucket 1 for now since they are there to sell.

4. Financial institutions/Banks/Credit Card companies – these can be considered as users as this is an online transaction-based feature and we could have them advertise as well –

For the purpose of this question – I want to focus and delve more deeper into the 1st category – Sellers

From this, I want to break it down a little more to see if we can hyper target a particular group as not all sellers are the same:

1. Experienced sellers – Know how to sell and have sold a lot online before- they know their target market, they understand budgets, know how to read analytics and target the right customer segments to target for their sales. They are experts in showcasing their products to entice customers into a purchase.

2. Non- Experienced sellers – They are relatively new to this. They have sold before but are not prolific at this – they typically rely on word of mouth or recommendations or reviews to get sales. They do not know how to navigate the competitive world of sales including not knowing their key customer cohorts, how to make their products seem appealing and need help.

3. First time sellers – They are completely new at this – they have no idea what to do and are not fluent in social media marketing. They are not as invested and often rely on traditional sites like e-bay or amazon for sales.

For the purposes of this answer, let’s go with the non-experienced sellers who are invested in growing their business via IG/social media but don’t know how and see their pain points.

Pain Points:

1.      Don’t have money or not inclined to invest in quality set up to take photos/videos to make their wares appealing – this can be a big hinderance to online sales – So, need some help from the platform.

2.      Even if they take good pictures, they are not sure how they should be displayed on the platform to attract customers.

3.      Online sales often needs good captions – they need help with understanding the right keywords that would target the right users.

4.      Apart from geo targeting, they are not sure of the right customer cohorts that they need to advertise to – to get their products displayed.

5.      Need help to understand customer behavior to see how they can sell their products better – when do I provide discounts to customers to get more sales? How much discount do I need to provide? – lots of analysis help needed

6.      Online transactions can be scary – need guarantee mechanisms on sales from the platform to ensure that they are not being scammed such as users breaking the products post delivery and asking for refund etc.

7.    Can’t afford to take a lot of haircuts on sales online – hence, need low or no transaction charges on the platform.

That’s quite a range of issues- let’s prioritize them so that we can understand the solutions we want to build for an MVP and beyond.

Priorities: 1,4,5,6,7,2,3

Solutions:

1.      Provide AI driven capability to enhance photos and videos once the user uploads it and provides a brief description of it – even going on to suggest ways to improve the photo such as angles that they could take to highlight certain features for better customer engagement.

2.      Use ML to determine the right background for the photos and videos as well as suggesting missing photos and angles that users can add to increase conversion rates. If a customer is not uploading videos, then make suggestions that can help improve their CTR and conversions.

3.      IG has rich data that can be used to provide sellers with the right targeting keywords and customer segments as AI powered options to enhance reach and improve engagement. This data can be provided to the user when they are uploading their wares on the Small Business page – this will take the stress away from sellers and encourage more of them to sell their wares on the platform.

4.      Provide an extensive dashboard for sellers to see their performance on the platform. This will include metrics of the top customer segments they are selling through, heatmap analysis to show where they are losing customers, cohorts of customers that are clicking on the page but not converting as well as metrics of performance over time on the platform.

5.      Provide sellers with the AI/ML driven capability to understand when and what sorts of discounts they can offer or recommendations on product pricing to entice customers to convert.

6.      Provide ability for the seller to chat with the buyer to provide real time tracking of the product including the non-optional requirement to take a picture of the package when being shipped to cover them from potential scams.

7.      The long-term goal here is engagement and getting more sellers to sell things on IG – In this case, we can provide a no commission platform for sales – while this can reduce revenue for IG, it leads to better engagement on the long term and attract more advertisers leading to more long-term revenue.

Now that we have some good solutions – let’s create a table to evaluate them based on RICE method to see how easy/difficult it is to build them.

Great – Now, let’s look at some metrics that would define success for us.

Metrics:
The key metric that we are tracking is Engagement as we discussed above – but I want to look at some metrics across the sales funnel as well -

Acquisition:

1.      # of sellers that are creating their page for the first time on IG

a.      % of these sellers who have posted at least 1 product for sale

2.      # new pages per seller

Engagement:

1.      DAU/WAU/MAU

2.      # of sellers who visit their page to make changes regularly (changes here refer to adding more wares, changing price/description etc.)

3.      # AI/ML based recommendations that are provided to sellers and % of them accepted by the seller for their wares.

4.      # of transactions per seller/per day etc.

5.      Total and Avg value of transaction for sellers on the IG platform

6.      Avg # of pages per seller

7.      Avg. number of categories a seller sells their products in.

Monetization:

1.      Total advertising revenue generated in the small business page

2.      # of advertisers

3.      Avg. revenue per advertiser