Here at QuietWrite, we have a philosophy about the user signup process that we call Progressive Signup. Basically, we eschew the typical signup wall for a more gradual process over a longer period of time. As the user plays with our product, we gently prod them at certain checkpoints to give us more info. This results in a better and more natural user experience.
Think of Progressive Signup as being similar to visiting an electronics store to buy a TV. What you expect is to be able to walk into the store, peruse their selection, play around with some of their floor models, and then begin the process of deciding on the best TV for your needs. After making a decision, you walk up to the cash register and hand over your credit card and credentials to make the purchase.
Throughout all this, you didn't really have to pause to think about "signing up." You did what was natural: progress at your own pace with the goal of leaving with a TV.
Now imagine that your visit to the store were more like the traditional signup model, where you're presented a long signup form before you can do any member activities on the site. This would mean that before you could even enter the store and play with their products, you would have to hand over your credit card and fill out a long survey form with your personal information. I don't know about you, but I would probably turn around and head for another store that doesn't have such costly entrance procedures.
As we design websites, we need to keep this simple brick and mortar example in mind: don't force the user to jump through hoops just to play with your product! You have enough to worry about with just getting the word out about your new website. When a user lands on your homepage for the first time, the last thing you want is to create barriers between them and your core product. Remember, users are poised over the back button, just waiting to leave your site if it isn't compelling.
But how do you decide on the checkpoints for Progressive Signup? Bokardo has a great article about keeping user lifecycles in mind. As the user transitions from being Unaware to a Passionate user, we should gather information about the user in proportion to their passion. If the passion-to-information ratio is too low, we risk losing the user altogether.
At QuietWrite, we've sectioned off the various stages of user signup like so:
When a new user lands on the homepage, we show a big button with some quick bullet points explaining the benefits of QuietWrite. When the user clicks the big button, we immediately drop them into our editor, which is the core value of our site. No signup information is necessary to edit and save writings on QuietWrite. We cookie the user so they can still access their writings at a later time, even if they give no further information.
As soon as a new user starts writing, we show an email and password field in the header, with a quick note saying they can signup in order to ensure that they can access their writings later. After the user decides that our product is worth it, they give us their email and a password. Note that there is always a good reason for a user to give information, and we emphasize it here by saying an email and password combination is a much more reliable way to retrieve your writings than with a cookie, which can get lost.
Currently, the final stage of our user lifecycle ends with the user publishing their writing. Right now, publishing isn't the core of QuietWrite, so a user with many writings that starts publishing is using our product to the full extent. When a user publishes their first writing, we prompt them to give a display name, which will better identify them to visitors. We could have done that at step 2, but it wasn't necessary.
By partitioning the signup process like so, getting information from the user feels less like a chore, and more natural. We've seen a lot of engagement from users that would never have played with our editor if we had a big signup wall in the beginning.
The biggest thing to keep in mind when designing a Progressive Signup process on your site is to ask: what is the minimal amount of information we need from the user in order for them to progress to the next step. Many times, you'll be surprised how little you need.
Update: Luke Wroblewski also has some great thoughts on this here, with respect to Twitter's redesigned signup flow.