Evaluating the Growth and Reality of Social Apps

Evaluating the Growth and Reality of Social Apps

Introduction:
Social apps have become an integral part of our daily lives, offering unique experiences and connecting people across the globe. However, for app developers and founders, understanding the benchmarks and facing the realities of their product's growth can be challenging. In this article, we will explore the key metrics for benchmarking social app growth and the importance of embracing the truth in order to achieve success.

Defining Core Metrics for Growth:
When benchmarking growth for social apps, it is crucial to define the core metric that aligns with your app's purpose. For most consumer social apps, the daily active users (DAUs) metric is essential, as it signifies consistent and engaged usage. However, for apps with less frequent use cases, weekly active users (WAUs) can serve as an acceptable starting metric.

Organic Growth and Virality:
Ideally, the majority of your app's growth should come organically. This is particularly important for social apps, as they often struggle to monetize early on and have limited resources for paid marketing. A truly viral app is one where users naturally invite their friends to enhance the overall experience. If a significant portion of your user acquisition is from paid sources in the early stages, it may be time to reassess your acquisition strategy.

Benchmarking User Growth:
To evaluate the success of your app's growth, benchmarking against industry standards is crucial. Here are the benchmarks for monthly user growth in seed-stage consumer social companies:

• OK: 20%
• Good: 35%
• Great: 50%

Additionally, the ratio of daily active users (DAU) to monthly active users (MAU) is another important metric. A "smiling" L-ness curve, where users make the app a regular part of their lives, indicates a strong engagement level. Here are the benchmarks for L5+ (users in the app five, six, or seven days a week) performance:

• OK: 30%
• Good: 40%
• Great: 50%+

Retention and Cohort Analysis:
Retention is a critical metric for social apps, as it determines how many users continue using the app over time. The n-day retention, focusing on specific days such as d1, d7, and d30, provides valuable insights. Here are the benchmarks for n-day retention:

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

Analyzing cohorts over time allows for a comprehensive understanding of the app's performance. Stable or improving metrics indicate strong network effects and increased value as more users join.

Embracing the Truth:
In the pursuit of success, it is essential to face the truth and avoid falling into the trap of confirmation bias, which blinds us to alternative perspectives. Customer discovery plays a crucial role in understanding user preferences and patterns. By talking to potential customers and looking for recurring themes, founders can separate fact from narrative and make informed decisions.

The Importance of Seeking Truth:
Lying to others is detrimental, but lying to oneself is even more damaging. Embracing the painful truth and seeking the truth, no matter how uncomfortable, is a vital characteristic of successful individuals. By acknowledging blind spots and flaws in our thinking, we can grow personally and professionally, leading to a more fulfilling life.

Actionable Advice:

1. Regularly track and analyze your app's core metrics, such as DAU and MAU, to gauge growth and engagement levels. Use benchmarks to understand industry standards and set realistic goals.
2. Conduct customer discovery and actively seek feedback from users to identify patterns and improve your product. Embrace the truth, even if it challenges your preconceived notions.
3. Utilize cohort analysis to gain insights into user retention and identify areas for improvement. Focus on stable or improving metrics to harness the power of network effects.

Conclusion:
Benchmarking social app growth and embracing the truth are essential for achieving success in the competitive app market. By understanding the core metrics, evaluating growth benchmarks, and facing the realities of user retention, app developers and founders can make informed decisions and build products that resonate with users. Remember, seeking the truth may be painful at times, but it is the path to a beautiful life.