Build state to create switching costs

The test for me, of whether you're building a product that has the ingredients to create a retentive product on a micro level, just at the user level, is that the product should get better the more you use it, and you'll have more to lose by leaving it.

The more you play any given game, the more state you're accruing. That might be your armor, your weapons, your character skins, and whatever. As a player of the game, the more state you build, the more you're compelled to stick around, because you don't want to lose everything you've worked so hard for.

"Building state" refers to accumulating user data, content, and network effects that make switching to competitors costly or impractical.

This building state concept is why mediocre companies like eBay or Craigslist remain completely unbeatable for decades. Even though the UX is bad, people don't like using them, they fail to innovate, no one topples them and it's because of state.

Every time a user users your product, let's say they're clicking on the mouse or they're tapping on their phone, I love to think of it as this kinetic energy that they're putting into your product. You're taking that energy, and your job with a great product, is to take that energy and, as much as possible, convert it back to the experience that they're having with your product.

Network effects is when you create value for passive members by other people joining the network. I am by myself, I have done nothing. I'm at home, chilling, but one person joins the network and immediately I gain benefit.