Should Rec Room prioritize developing more user-generated content tools or focus on creating official, high-quality rooms to attract new players?

Introduction

The trade-off question at hand is whether Rec Room should prioritize developing more user-generated content tools or focus on creating official, high-quality rooms to attract new players. This scenario involves balancing the platform's core strength in user-generated content with the potential to attract new users through polished, official experiences. I'll approach this analysis by examining the product ecosystem, evaluating potential impacts, and designing experiments to inform our decision.

Step 1

Clarifying Questions (3 minutes)

• Context: I'm thinking about Rec Room's current market position. Could you share any recent user growth trends or engagement metrics?

Why it matters: Helps understand if we're in a growth or retention phase Expected answer: Moderate growth with plateauing engagement Impact on approach: Would influence whether we prioritize new user acquisition or existing user retention

• Business Context: Based on Rec Room's business model, I assume user-generated content is a key driver of engagement and monetization. Can you confirm if this is still the case, or if there's been a shift in revenue streams?

Why it matters: Determines the financial impact of focusing on official content vs. UGC tools Expected answer: UGC still primary, but exploring new monetization avenues Impact on approach: Would affect resource allocation between UGC tools and official content

• User Impact: I'm curious about our user segments. What's the current split between content creators and consumers, and how has this changed recently?

Why it matters: Helps balance the needs of different user types Expected answer: 20% creators, 80% consumers, with creator percentage slowly growing Impact on approach: Would influence whether to focus on empowering creators or improving the consumer experience

• Technical: Regarding our platform capabilities, are there any significant technical limitations or upcoming improvements that could affect our ability to support more complex UGC tools or high-quality official rooms?

Why it matters: Ensures proposed solutions are technically feasible Expected answer: Current infrastructure can handle either option with some scaling Impact on approach: Would determine the scope and timeline of potential solutions

• Resource: Considering our current team structure, do we have more capacity in terms of UGC tool development or in creating official content?

Why it matters: Helps align recommendation with existing team strengths Expected answer: Stronger UGC tool development team, but growing content creation capabilities Impact on approach: Would influence whether we leverage existing strengths or invest in building new capabilities