Product Name: Perplexity AI

Product Type: B2C

Market scope: India

Current Users in India: 1 million ​

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Objective: Understand the potential of Perplexity AI in the Indian market and devise user acquisition strategy for the indian market.

About Product

What is Perplexity?

Perplexity is an alternative to traditional search engines, where you can directly pose your questions and receive concise, accurate answers backed up by a curated set of sources. It has a conversational interface, contextual awareness and personalisation to learn your interests and preferences over time.

Perplexity supports Desktop web, Mobile web, Chrome extension (browser), ios mobile app (Appstore), android mobile app (Playstore).

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Click here to view core desktop web product workflows. The core workflow is same across web and mobile applications.

After using the Product, workflow is simple and give option to search with or without logging in reducing friction for first time users.

Perplexity have average rating of 4.73 across ProductHunt(4.7), Playstore(4.6), Appstore(4.9).

Click here to view more detailed reviews.

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Perplexity have 1 million users in India and a total of 10 million users across the world.

Perplexity predominately used PR, third party reviews to acquire users.

• Founder first approach - Founders appeared on major news channels and explained the Product and company story.
• Third party video reviews - A lot of podcasters and technology reviewers picked up the story and reviewed the product on their Youtube channels/ blogs further fuelling the growth.
• Perplexity as an alternative to Google search worked really well so far.

Click here to view PR, reviews and marketing campaigns.

Perplexity has a Referral program which can be accessed by Premium members (10$ for successful referral). Reward is half of their monthly subscription cost.

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User Research

Research Objectives:

1. Macro → Acquisition strategy for Perplexity
2. Micro (3-4)→
3. 1. Within acquisition, I am trying to understand who is using Perplexity?
   2. Within acquisition, I am trying to understand why are they using it for?
   3. Within acquisition, I am trying to understand where else go to solve their problem?
   4. Within acquisition, I am trying to understand if the users are achieving their end result and have any aha moments.
   5. Within acquisition, I am trying to understand where the users spend majority of their online and offline?
   6. Within acquisition, I am trying to understand how did a user learn about perplexity and what was their experience?
   7. Within acquisition, I am trying to understand how frequently users are using the product?
   8. Within acquisition, I am trying to understand why does a user switch from free plan to a premium plan? If already a user, why? if not a user, what do they think about premium plan?

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Designing Questions

1. Within acquisition, I am trying to understand who is using Perplexity?
2. 1. demographics (survey)
3. Within acquisition, I am trying to understand user behavior before/on/after perplexity?(Use case)
4. 1. What are the different topics/categories searches user has made? what are the different ways you have used the product for? (Interview)
   2. How many corrections/ nudges the user has to make before getting ideal search results for their general search? how long does a user take to find what they are looking from the search? (Interview)
   3. How frequently you use perplexity? (survey)
   4. 1. At least once a day
      2. Multiple times in a day
      3. Once a week
      4. 1-10 times in a week
      5. more than10 times in a week
      6. I am not using perplexity anymore
   5. How does a user generally end up on perplexity chat interface? whats the task they are trying to achieve? was the user using any digital app before ending up on perplexity? (interview)
   6. How does a user use the information/ search results generated by perplexity? What are the immediate applications/ products user interact while using or just after the use of perplexity? (interview)
   7. How satisfied are you with Perplexity search results? rating scale (survey)
5. Within acquisition, I am trying to understand where else go to solve their problem?
6. 1. What are the alternative tools you use to accomplish a search? (survey)
7. Within acquisition, I am trying to understand if the users are achieving their end result and have any aha moments.
8. 1. What is that one thing that you absolutely love about Perplexity? (survey)
9. Within acquisition, I am trying to understand where the users spend majority of their online and offline?
10. 1. What are the different apps they use social, etc? (survey)
    2. What are the offline places they generally go to? Brands they use? (survey)
11. Within acquisition, I am trying to understand how did a user learn about perplexity and what was their experience?
12. 1. How did you come to know about perplexity? (survey)
    2. Was the website enough to understand what the product solves? (survey)
13. Within acquisition, I am trying to understand why does a user switch from free plan to a premium plan? If already a user, why? if not a user, what do they think about premium plan?
14. 1. how do you use perplexity? (survey)
    2. 1. I do not login to use Free account
       2. I login to use Free account
       3. I have a Premium account
    3. If free, do you see any need for you to convert to a Premium plan? (interview)
    4. If on Premium, What made you sign up? Was it communication? Timing? Offer? (interview)

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Final Survey - https://tally.so/r/mJRLe7

1:1 Interview questions

1) What are the different topics/categories searches you have made? and what are you trying to accomplish on the Perplexity?

2) How many corrections/ nudges you have to make before getting ideal search results while using? how long do you take to get a satisfied answer?

3) How do you generally end up on perplexity chat interface? whats the task you are trying to achieve? Were you using any software/ product before ending up on perplexity, what is it?

4) How do you use the information/ search results generated by perplexity? What are the immediate applications/ products you interact while using or just after the use of perplexity?

5) Do you see any need for you to convert to a Premium plan? If you ever convert to a premium plan, what will be the scenario.

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Ideal Customer Profiles

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ICP Prioritisation framework

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Prioritisation Reasoning:

Assumption: Since this is an acquisition project, not focusing much on monetisation and product is available in freemium model.

Based on above framework prioritising considering high value, low CAC and high ease of adoption; narrowing it down to two channels:

• ICP-2: Working Professional
• • Habit forming phase → Continue search and ease of achieving outcomes may lead to potentially higher LTV when ICP graduates & continues using.
  • Potentially pays but lower chance.
• ICP-3: Founders/ Business Managers
• • Great use-case. Immediate outcome.
  • Mostly use freemium model until the they exceed the limits.
  • Have appetite to pay. Higher chance to get converted.

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Market Research

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Click here for in depth Market research.

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Scope is Indian Market though the product is international product.

Perplexity is a free search product and can be converted to Premium based on the user need and usage.

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There are a total of 820 million internet users in india.

Market for Free Search Product:

TAM = 620 million

(Assumption, users use Jio Cinema (IPL & Disney hotstar merger) and often use search for cricket score or to know more about their favourite player or actors) reference

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SAM = 130 million users - (English speaking users as Perplexity is only available in English, Users should know English.) reference

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SOM = 20.56 million users

(Based on the priority ICPs who uses our product for learning, 20.56 million is the number of learners on Udemy. this user segment mostly consists of all users who want to put in effort to gin knowledge). reference

Average ARPU = 1 $ (generated via ads)

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Market size for free search product is 20.56 million * 1$ = ~ 20 million $ (Potential revenue from advertising in Indian market)

Market for Paid/Upgrade Search Product:

FYI: In user research no one needed premium version of Perplexity as either they have alternate product or free access suffice their needs.

Nonetheless, lets estimate the market for Paid/Upgrade Search Product.

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TAM = 130 million users - (English speaking users as Perplexity is only available in English, Users should know English.) reference

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SAM = 20.56 million users

(Based on the priority ICPs who uses our product for learning, 20.56 million is the number of learners on Udemy. this user segment mostly consists of all users who want to put in effort to gin knowledge). reference​

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SOM = 7.2 million users

(The above users are making >10 lakhs per annum and can afford to pay 20 $ or 1500 rupees per month if the need comes up) reference

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Considering the adjusted price point for indian users of 5$ per month. Low Premium plan.

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Average ARPU = 5*12 $ = 60$ (generated via subscriptions)

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market size for free search product is 7.2 million * 60$ = ~ 430 million $ (in the best case scenario for indian search subscription market).

Core Value Proposition:

Search and discovery with AI along with verifiable sources.​

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Designing Acquisition Channels

As there is no visibility for the immediate monetisation from the users (B2C) in Indian market, the plan is to reach the potential users with use cases and build brand value/ mind share so that indian users think of perplexity for their needs of knowing something or completing a task with AI.

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Choosing Acquisition channels with Low CAC or almost no CAC.

Yes

Organic search

Capturing incoming interest and expanding on this seems to be a good idea. Often the prioritised ICPs search for task/ use case in Google/ Youtube and go to Specialised AI chat interfaces like Perplexity.

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Content loops

As there is a lot of data generated by the free users, converting system & user generated data into some form of content loops seems to be a good idea.

Maybe or No

Paid advertising - No

As there is no immediate visibility for monetisation. IMO this can be used to fuel conversion of free users to paid users.

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Product Integrations - Maybe

ICPs often use Linkedin, Workplace softwares like powerpoint/ docs, Browser, Development environment etc. Direct integration needs a lot of accuracy and access to workplace/ personal information which user might not be comfortable.

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Referral/ Partner Design - Maybe

1. 1. 1. 1. As perplexity built on top of llm models, and late to the market, first mover ChatGPT have brag worthy proposition like AI chat and perplexity lacks it. From user research, it is observed that Perplexity is making a name for itself on attributing references/ sources for easy verification or validation of AI generated answers.
         2. Users often didn't know about the upload a file and generate answers from it. It is a great feature which can help users converse with documents/ files. This feature has potential and have brag worthy proposition in the workplaces.
         3. Perplexity has usage limits for free plan. Usage limits can be used to design referral program.

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Click here for detailed experiments in the Chosen Acquisition Channels. [Organic Search and Content Loops]

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Thank You.

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