John Egan has been a Growth Engineer Pinterest for over 4 years. Previously, he was the Engineering Lead for the growth team Shopkick. Read more from John Egan at his website the Pinterest Engineer blog, and twitter.

What are some ways Pinterest has been successful at driving sustainable growth?

At Pinterest we believe that retention is the key to sustainable growth. If you can nail retention then not only do you have fewer existing users churning out each week, but you also able hold on to a much larger percentage of new signups.

Over the past year we’ve made a lot of progress in new user retention (aka activation) for underrepresented demographics on Pinterest. For our users, quality content is a big driver of the value of Pinterest. However, early on we didn’t do a great job of surfacing appropriate content for male users or non-English speaking users. Most of the major retention wins for those demographics boiled down to personalizing content in feeds, search, our new user experience, etc. based on gender and locale.

This past year we’ve also had a lot of wins through SEO & optimizing our signup prompts. Whenever running signup experiments the key to sustainability is ensuring those new signups are actually converting to active users. Thankfully, we have put a lot of work into retention & new user activation, so those signup wins translated into equally big wins in active users.

[Tweet “At @Pinterest we believe that retention is the key to sustainable growth. – @jwegan”]

How has Pinterest News helped increase user engagement?

Pinterest News was motivated by two goals. Pinterest can be used for a multitude of different use cases and sometimes we hear that users just don’t “get” how they can use Pinterest. So, one of the goals was to help with retention/activation by giving pinners an avenue to discover new ways of using Pinterest through seeing how their friends use Pinterest. The other goal was to create a new source of content that we could draw upon to help re-engage users via push notifications or email. Emails & push notifications are only effective if the content in them is interesting enough to pique the user’s interest and get them to engage with it. Based on previous experiments we saw indications that social content had this potential. Both these factors helped make News successful at driving increases not only in DAUs but also other key metrics such as repins and pin closeups as well.

You point out the importance of evaluating ROI when selecting projects for your growth team.  How frequently should you stop and re-evaluate ROI for ongoing projects?

The way we generally operate is at the beginning of the quarter we create a list of projects & stack rank them by ROI. When an engineer is ready to work on a new project we simply pick one off the top of the list. Any new project ideas we come up with during the quarter simply get inserted into the list based on their ROI. However, once we start a project we will usually see it through to completion. I would say we focus on re-evaluating ROI for upcoming projects constantly, but rarely re-evaluate an ongoing project unless it becomes apparent that we were dramatically off in our estimates for how much work it would take.

What is geofencing and how can it be used as an engagement and re-activation tool?

Geofencing is the ability to send a push notification to a user when they are close to a particular location. One major challenge a lot of location based apps face is getting the user to open the app at a time the app is actually relevant. We encountered this issue a lot when I was at Shopkick, which was a mobile rewards app for retail shopping. For apps like Shopkick, geofencing was a godsend since it allows the app to ping the user only when there is something interesting & actionable nearby. Implementing geofencing at Shopkick was a big engineering effort since we had to balance accuracy, batter drain & user annoyance, but all that effort paid off. Geofencing led to solid double-digit increases in retention and activation & was one of our biggest needle movers in terms of retention.

What do you consider to be the most important (or telling) growth metrics and why?

I touched on it a little bit earlier, but I think the most important growth metric is retention. The better you are at retention the fewer users you will churn out and the more new users you will hold on to. For most consumer Internet startups, retention is one of the best indicators for your growth potential. Apps like Facebook & Whatsapp have phenomenal retention, which is why they have been able to grow so massive.

One particular retention metric I like to use a lot is “1d7s” which is basically the percentage of users that visit your app/site a second time in the seven days following signup. From my experience this metric is highly correlated with a users long term retention, but the time-window is also short enough that you can run experiments against this metric pretty rapidly.

[Tweet “One particular retention metric I like to use a lot is ‘1d7s’…” @jwegan”]

How early in the product development lifecycle should companies start thinking about customer retention?

I don’t think you really need to have a new user email drip campaign ready to go on day 1, but I do think you should be paying attention to retention from the very beginning.

Early on, while you’re still trying to find product market fit, your retention numbers can be a great indicator of if you’ve reached it or not. Find out what the retention numbers in general are for apps in your category and compare your numbers to that.

I would suggest waiting to start working on mechanisms to drive retention (ex: email, push notifications, etc.) until you’ve started to get traction & you’re in the growth phase of the startup. Focus on communicating the value of your product and/or reaching product market fit first.