The Small Steps of Giant Leaps: 4 Metrics Every Growth Hacker Should Be Watching

The Small Steps of Giant Leaps: 4 Metrics Every Growth Hacker Should Be Watching

In the world of growth hacking, it's easy to get caught up in the numbers. Total users, daily active users (DAU), and monthly active users (MAU) are often the metrics that are focused on and shared with the press. However, these numbers can be considered as vanity metrics, as they don't provide any real insight into the growth rate or the quality of the users being acquired.

To truly understand the success of your growth hacking efforts, there are four key metrics that every growth hacker should be watching. These metrics go beyond the surface-level numbers and provide valuable insights into user acquisition, re-engagement, retention, and overall growth rate.

The first metric to pay attention to is the daily net change. This metric tells you on a daily basis how much your user base has grown or shrunk. By plotting this data on a graph, you can assess new user acquisition, re-engagement, and retention. This allows you to easily see the impact of each component on your current growth rate.

But not all active users are created equal. The second metric, core daily actives, takes into account the frequency of usage. It only counts users who have been using your service on a regular basis. To calculate this metric, you need to identify the number of users who used your service today and have also used it five or more times in the past four weeks. This metric gives you a better understanding of the quality of your user base and how engaged they are with your product or service.

While the first two metrics focus on user growth and engagement, the third metric, cohort activity heatmap, provides insights into user retention. This metric shows how your user retention curve has changed over time. By analyzing the cohort activity heatmap, you can identify any changes in user behavior and make necessary adjustments to improve retention rates. It's important to track this metric on a regular basis, as even a small difference in percentage points can compound over time.

Now that we've covered the importance of tracking these metrics, let's dig deeper into the concept of compounding results. As stated in the article "The Small Steps of Giant Leaps" by Farnam Street, strong positions are not an accident, and weak positions aren't bad luck. The position you find yourself in today is the result of the small choices you've been making consistently over time.

Consistency is key when it comes to achieving compounding results. It's not enough to have intensity in the short term. To truly see the benefits of compounding, you need to be consistent with your efforts. This means consistently making the small choices that will compound over time and position you for future success.

When you excel at these small choices, you put yourself in favorable circumstances. No matter what happens in the world, you're never forced into a bad decision. The magic of giant leaps lies in the series of ordinary choices that suddenly become noticeable. It's important to look below the surface and understand that extraordinary results are achieved through the accumulation of ordinary actions.

Now that you have a better understanding of both the metrics and the concept of compounding results, here are three actionable pieces of advice to incorporate into your growth hacking strategy:

1. Focus on quality over quantity: While it's important to acquire new users, make sure to prioritize the quality of those users. By tracking core daily actives, you can identify the users who are truly engaged with your product or service, allowing you to focus your efforts on retaining and re-engaging them.

2. Be consistent in your efforts: Consistency is crucial when it comes to achieving compounding results. Make a habit of consistently making the small choices that will lead to long-term success. Remember, it's the accumulation of these choices over time that will set you apart.

3. Monitor and analyze user retention: Use the cohort activity heatmap to track changes in user retention over time. By identifying any adverse changes in the conversion funnel, you can make necessary adjustments to improve retention rates. Even small improvements in retention can have a significant impact on overall growth.

In conclusion, as a growth hacker, it's important to go beyond the surface-level metrics and focus on the metrics that truly provide insight into your growth rate and user quality. By tracking daily net change, core daily actives, and cohort activity heatmap, you can gain a deeper understanding of your user base and make data-driven decisions to drive growth. Additionally, by embracing the concept of compounding results and consistently making the small choices that matter, you'll position yourself for long-term success in the ever-evolving world of growth hacking.