Benchmarking Growth and Creating a Future: Insights for Social App Success

Benchmarking Growth and Creating a Future: Insights for Social App Success

Introduction:
Building and growing a successful social app requires careful benchmarking and a clear vision for the future. In this article, we will explore the key metrics for benchmarking growth in social apps and discuss the importance of creating a future-focused mindset. We will also delve into the concept of familiar surprises and how it can drive engagement and success in the social app space.

Defining Core Metrics:
When benchmarking growth, it is crucial to define your core metric. For most consumer social apps, the daily active users (DAUs) metric is essential. The goal is to have users engaging with your app on a daily basis. However, for apps with less frequent use cases, weekly active users (WAUs) can also be a starting metric. Eventually, transitioning to DAUs is necessary for securing a prominent spot on users' home screens.

The Role of Organic Growth:
Ideally, a significant portion of your app's growth should come organically. This is because social apps often struggle to monetize in the early stages, limiting their ability to invest in paid marketing. Additionally, social apps should have inherent virality, with users naturally inviting their friends to enhance the experience. If a large percentage of your users are coming from paid sources, it may indicate a need to reconsider your acquisition strategy. Sustainable growth should primarily come from the product itself.

Benchmarking User Growth:
For monthly user growth in seed-stage consumer social companies, the following benchmarks can be helpful:

• OK: 20%
• Good: 35%
• Great: 50%
  These benchmarks provide a framework for evaluating the growth of your app and can serve as goals to strive for.

Leveraging L-ness Curve:
Best-in-class social apps exhibit an L-ness curve that "smiles," indicating that users are making the app a regular part of their lives. This means that users are consistently engaging with the app over time. For weekly L-ness curves, focusing on L5+ performance, which measures the number of users in the app five, six, or seven days a week, can indicate near-daily use behavior.

Retention Metrics:
Retention is a critical aspect of social app success. Measuring n-day retention, specifically d1, d7, and d30, allows you to evaluate how many users from an original cohort continue to use the app over time. The following benchmarks can be useful:

• OK: d1 50%, d7 35%, d30 20%
• Good: d1 60%, d7 40%, d30 25%
• Great: d1 70%, d7 50%, d30 30%

Cohort Analysis:
Analyzing metrics over time and by cohort provides a more comprehensive understanding of your app's performance. Stable or improving metrics across cohorts indicate strong network effects, where the app becomes more valuable as more users join.

Creating a Future-Focused Mindset:
When evaluating a social app's potential, it is crucial to consider the future it aims to create. Asking yourself why now is essential in identifying unique market opportunities and understanding the timing of your app's launch. Successful technology giants often leverage key enablers, such as technological advancements or shifts in consumer behavior, to achieve success.

The Power of Familiar Surprises:
To engage users effectively, social apps should aim to create moments of meaning by combining elements of the familiar and the new. The ability to evoke curiosity while also providing a sense of understanding is crucial. By architecting familiar surprises, social apps can capture users' attention and drive engagement.

Three Actionable Advice:

1. Focus on organic growth: Prioritize creating a product that users naturally want to share with their friends, rather than relying heavily on paid marketing.
2. Analyze cohorts over time: Track metrics across cohorts to identify trends and ensure stable or improving performance.
3. Embrace familiar surprises: Strive to create moments of meaning by combining elements of the familiar and the new, captivating users with unexpected experiences.

Conclusion:
Benchmarking growth and creating a future-focused mindset are essential for the success of social apps. By defining core metrics, prioritizing organic growth, and leveraging familiar surprises, social app developers can build engaging and sustainable platforms. Understanding user behavior and consistently analyzing metrics will allow for continuous improvement and success in the ever-evolving social app landscape.