Unlocking the Potential of Social Apps: A Benchmarking Guide

Unlocking the Potential of Social Apps: A Benchmarking Guide

Introduction:
Developing a successful social app can often feel like trying to catch lightning in a bottle. However, once a product is released into the market, assessing its performance and potential becomes more scientific than most people realize. In this article, we will explore the key metrics and benchmarks that can help determine the growth trajectory of social apps.

Defining the Core Metric: Daily Active Users (DAUs)
For most consumer social apps, the core metric for benchmarking growth is daily active users (DAUs). The goal is to have users engaging with the app every day. While the growth may not be consistent, the overall trend should be upwards. Ideally, organic growth should be the primary driver, with users inviting their friends to enhance the experience. If a significant percentage of users are coming from paid sources in the early stages, it may be necessary to rethink the acquisition strategy.

Engagement Ratios: DAU/MAU
Another important metric is the ratio of daily active users to monthly active users (DAU/MAU). This metric indicates the level of engagement among users. A benchmark of 25% DAU/MAU is considered acceptable, while 40% is good and 50% or above is great. A higher DAU/MAU ratio suggests that users are making the app a regular part of their daily lives.

The L-ness Curve: Measuring User Activity
The L-ness curve is a metric that looks at the distribution of users by the number of days they are active over a specific time period. Best-in-class social apps have an L-ness curve that "smiles" or even better, has a "crooked smile" that skews towards the right. This indicates that users are consistently engaging with the app. A benchmark of 30% L5+ performance is considered okay, while 40% is good, and 50% or above is great.

Retention: The Key to Long-Term Success
Retention is a crucial factor in determining the long-term success of a social app. The primary metric for retention is n-day retention, which measures the percentage of users who remain active after a specific number of days. A benchmark of 50% retention on day 1, 35% on day 7, and 20% on day 30 is considered okay. Good retention would be 60% on day 1, 40% on day 7, and 25% on day 30, while great retention would be 70% on day 1, 50% on day 7, and 30% on day 30.

Monitoring Retention Curve Flattening
It is also important to monitor how quickly the retention curve flattens out. In most cases, the slope of the line starts to flatten between day 7 and day 14, with a plateau being reached by day 20. Significant degradation of retention between day 7 and day 30, without flattening of cohorts by day 30, can be a cause for concern as it suggests that longer-term retention may not be sustainable. A benchmark of 40% retention on week 1 and 20% retention on week 4 is considered okay, while 55% and 30% respectively is good, and 75% and 50% respectively is great.

Actionable Advice:

1. Focus on organic growth: Strive to create a product that users naturally want to share with their friends, as this indicates a strong viral potential.
2. Monitor engagement ratios: Continuously track the DAU/MAU ratio to ensure users are actively engaging with the app on a regular basis.
3. Pay attention to retention: Keep a close eye on n-day retention metrics and aim for steady retention rates over time.

Conclusion:
Benchmarking the growth and performance of social apps is crucial for predicting their success. By focusing on core metrics such as DAUs, engagement ratios, L-ness curves, and retention, app developers can gain valuable insights into their app's potential. By following the actionable advice provided, developers can increase the likelihood of creating a social app that resonates with users and achieves long-term success.