The Waves of Successful Generative Tech Startups and Benchmarking Your Social App's Growth

The Waves of Successful Generative Tech Startups and Benchmarking Your Social App's Growth

Introduction:
Technological advancements have always driven waves of successful startups, each revolutionizing the way we live and work. From internet browsers to smartphones, these revolutions have transformed industries and created new opportunities. The latest wave, the Generative Tech revolution, is set to disrupt traditional business models and pave the way for innovative startups. In this article, we will explore the three waves of successful generative tech startups and delve into how to benchmark the growth of social apps.

1st Wave: Wrappers Around AI Models:
The first wave of generative tech startups focuses on repackaging artificial intelligence (AI) into user-friendly interfaces. These companies capitalize on the benefits of AI and address customer pain points. Speed, sales, customer understanding, and service are crucial factors for success in this wave. By leveraging AI technology, these startups provide innovative solutions that enhance user experiences.

2nd Wave: Generative AI Inside:
In the second wave, companies utilize AI internally to enhance their operations and outperform competitors. Unlike the first wave, customers in this phase are not explicitly sold on AI but rather on the superior quality, cost-effectiveness, and efficiency of the product or service. By integrating AI seamlessly into their businesses, these startups gain a competitive edge and attract customers based on the value they offer.

3rd Wave: Visionary & Non-Obvious:
The third wave of generative tech startups represents the visionary stage, where new and groundbreaking ideas emerge. These startups are built by visionaries who are unafraid to reinvent existing concepts and explore unexplored territories. They identify new transactions and possibilities that were previously unimaginable. This wave is characterized by revolutionary advancements that reshape industries and create opportunities that were not previously conceivable.

Benchmarking Your Social App's Growth:
To ensure the success of a social app, it is vital to benchmark its growth against industry standards. Key metrics such as daily active users (DAUs), monthly active users (MAUs), retention rates, and weekly usage patterns provide valuable insights into the app's performance.

1. Core Metric: DAUs and WAUs:
   For most consumer social apps, DAUs serve as the core metric, indicating the frequency of user engagement. A target growth rate of 20% is considered acceptable, while 35% and 50% growth rates are considered good and great, respectively. Similarly, weekly active users (WAUs) can be used as a starting metric for less frequently used social apps.

2. Organic Growth and User Acquisition:
   Organic growth is highly desirable for social apps, as it indicates the app's inherent virality and user satisfaction. If more than 10-20% of users come from paid sources, it may be necessary to reevaluate the acquisition strategy. It is crucial to prioritize product-driven growth rather than relying solely on marketing efforts.

3. Retention Rates and L-ness Curve:
   Retention rates are essential for assessing user engagement and loyalty. The n-day retention rate, focusing on the percentage of users entering the app within specific timeframes, provides valuable insights. A benchmark of 50% for d1, 35% for d7, and 20% for d30 is considered acceptable. Higher percentages indicate stronger user retention.

Conclusion:
The waves of successful generative tech startups demonstrate the evolution of technology and its impact on industries. From repackaging AI to visionary innovations, each wave builds upon the previous one, creating new opportunities and reshaping industries. Benchmarking the growth of social apps is crucial for success, with metrics such as DAUs, retention rates, and organic growth serving as key indicators. By understanding these waves and effectively benchmarking growth, startups can position themselves for success in the ever-changing tech landscape.

Actionable Advice:

1. Focus on speed, sales, customer understanding, and service to succeed in the first wave of generative tech startups.
2. Prioritize organic growth and product-driven acquisition strategies to ensure sustainable growth for social apps.
3. Monitor retention rates and aim for higher percentages at various time intervals to gauge user engagement and loyalty.