"The Power of Product-Led Communities and Benchmarking Social Apps"

"The Power of Product-Led Communities and Benchmarking Social Apps"

Introduction:

For thousands of years, human communities were primarily based on geographical locations. However, the advent of mobile phones and the internet has revolutionized the way we connect with others. With unprecedented access to knowledge, markets, opportunities, and people, individuals today are born as individuals and have to find their own sense of belonging. This shift has given rise to product-led communities, which revolve around a specific product or service that helps people achieve valuable outcomes. As traditional forms of belief and belonging, such as religion, decline in popularity, people are searching for alternative ways to connect and find purpose. Authentic communities, both online and offline, provide a sense of trust, safety, and belonging, vital for the well-being of individuals, neighborhoods, companies, and even democracies.

Connecting Online and Offline Communities:

In the digital age, young people are increasingly comfortable forming relationships online, whether they are purely online or have an online-first approach. This trend is fueled by the desire for genuine connections and the convenience of forging relationships beyond geographical boundaries. However, the need for human connection remains, and individuals still crave a sense of belonging in physical communities. Balancing both online and offline interactions can lead to a more fulfilling social experience.

Aligning Values and Purpose:

Consumers today are drawn to brands that align with their values and take a stand on social issues they care about. This desire for shared purpose extends to online communities as well. Social apps that champion causes and create a sense of community around shared values have a higher chance of attracting and retaining users. By fostering a sense of purpose and belonging, these apps become an integral part of users' lives, leading to organic growth and increased user engagement.

Benchmarking Social Apps for Success:

To measure the success of social apps, it is essential to establish core metrics that reflect user activity and engagement. For most consumer social apps, daily active users (DAUs) serve as a primary benchmark. The goal is to have users engage with the app on a daily basis, ensuring its place on users' home screens. For less frequently used apps, weekly active users (WAUs) can also provide valuable insights. However, the ultimate aim is to transition to DAUs for maximum impact.

Organic Growth and Virality:

Social apps should aim for organic growth, minimizing reliance on paid marketing strategies. Organic growth indicates that users find value in the app and actively invite their friends to join, creating a self-sustaining cycle. If a significant portion of users comes from paid sources, it may be necessary to reevaluate the acquisition strategy. Investing in product improvement and user experience is crucial for achieving sustainable growth.

Retention and Regular Use:

Retention is a key metric for social apps, focusing on how many users continue to engage with the app over time. N-day retention, which examines the percentage of users from an original cohort who remain active on specific days (such as day 1, day 7, and day 30), provides valuable insights. Higher retention rates indicate that users are finding long-term value and making the app a regular part of their lives. Weekly retention is relevant for apps transitioning into networks, where users initially come for a specific tool and stay for the broader network.

Cohort Analysis and Network Effects:

While point-in-time metrics are useful, cohort analysis provides a deeper understanding of app performance. Evaluating metrics over time allows for tracking trends and identifying areas for improvement. Successful social apps exhibit strong network effects, where the product becomes increasingly valuable as more users join. Cohort analysis helps determine if the app's value proposition is resonating with users and if network effects are leading to sustainable growth.

Actionable Advice:

• 1. Foster a sense of community and belonging: Create an environment that promotes trust, safety, and shared values. Encourage users to connect with each other and form meaningful relationships within the app.

• 2. Continuously improve the user experience: Invest in product development and design choices that enhance user engagement. Regularly gather user feedback and incorporate it into app updates to meet evolving user needs and preferences.

• 3. Champion a cause or purpose: Align your brand or app with a social issue or cause that resonates with your target audience. By taking a stand and providing a platform for like-minded individuals to connect, you can attract and retain users who share your values.

Conclusion:

In the age of digital connectivity, product-led communities offer a new form of belonging and connection. By focusing on a specific product or service that helps users achieve valuable outcomes, these communities provide a sense of purpose and foster genuine connections. Benchmarking social apps based on core metrics such as daily active users, retention rates, and cohort analysis is crucial for measuring success and identifying areas for improvement. By incorporating actionable advice, such as fostering community, improving the user experience, and championing a cause, social apps can create authentic connections and thrive in the digital landscape.