Benchmarking Your Social App: Key Metrics and Success Stories

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Sep 10, 2023

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Benchmarking Your Social App: Key Metrics and Success Stories

Introduction:

Creating a successful social app requires not only a great product but also a solid understanding of key metrics for growth and user engagement. In this article, we will explore the core metrics used to benchmark social apps and highlight the success story of Bumble, a popular dating app. By examining these metrics and real-world examples, we can gain insights into how to measure and improve the performance of our social apps.

Defining Core Metrics:

When benchmarking growth, it is essential to define the core metric that aligns with your app's use case. For most consumer social apps, daily active users (DAUs) are a crucial metric as it signifies the frequency of users engaging with your product. However, for apps with less frequent use cases, weekly active users (WAUs) can be an acceptable starting metric.

Organic Growth and Virality:

Ideally, a significant portion of your app's growth should come organically. Social apps often have limited resources for paid marketing, especially in the early stages. Moreover, social apps should be inherently viral, with users motivated to invite their friends to enhance their experience. If a substantial portion (more than 10-20%) of your users come from paid sources, it may be necessary to rethink your acquisition strategy.

Benchmarking DAU/MAU Ratio:

The ratio of daily active users (DAUs) to monthly active users (MAUs) is another essential metric to assess user engagement. A higher DAU/MAU ratio indicates that users are actively incorporating your app into their daily lives. Best-in-class social apps often exhibit an "L-ness curve" that skews right, indicating a regular and frequent use behavior.

Measuring Retention:

Retention is a critical aspect of user engagement and long-term success for social apps. One primary metric for retention is n-day retention, which focuses on what percentage of the original cohort continues to use the app on specific days (e.g., d1, d7, d30). Benchmarking n-day retention helps evaluate the stickiness of your app and its ability to retain users over time.

Importance of Cohorts:

While point-in-time numbers can provide valuable insights, analyzing cohorts is even more informative. Cohort analysis allows us to observe trends and identify whether metrics are stable or improving over time. In a good social app, network effects should make the product more valuable as more users join.

Success Story: Bumble:

One remarkable success story in the realm of social apps is Bumble. Founded in 2014 by Whitney Wolfe Herd, Bumble quickly gained popularity as a women-centric dating app. Wolfe Herd's previous experience at Tinder, where she sued her employer for sexual harassment, motivated her to create a safer and more empowering dating platform.

Bumble's revenue growth is impressive, with $417 million reported in the first nine months of 2020, up from $363 million in the same period of 2019. Although Match Group, the parent company of Tinder, remains far larger in terms of revenue, Bumble's rapid growth presents a promising trajectory.

Actionable Advice:

  • 1. Prioritize organic growth: Focus on creating a viral and engaging product that encourages users to invite their friends. Aim for a significant portion of your user base to come from organic sources rather than relying heavily on paid marketing in the early stages.
  • 2. Enhance user engagement through retention: Continuously evaluate and improve your app's retention metrics. Monitor n-day retention rates and strive for higher percentages at key milestones, such as d1, d7, and d30. Cohort analysis can provide deeper insights into long-term user engagement.
  • 3. Foster network effects and value creation: Aim to create a social app with strong network effects, where the product becomes more valuable as more users join. Encourage users to actively engage and connect with others, making your app an integral part of their daily lives.

Conclusion:

Benchmarking your social app's growth and user engagement is crucial for long-term success. By defining core metrics, prioritizing organic growth, focusing on retention, and fostering network effects, you can create a compelling and valuable social app. Learn from success stories like Bumble, where a combination of innovative features and user-centric design propelled the app to become a billion-dollar success.

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