Expanding User Base and Involvement: An Innovative Metric for Growth
Are you tired of hearing about the Facebook IPO? I know I am! All the recent news can be overwhelming for those trying to create cool tech stuff. I was excited when my friend Lee shared some interesting facts about Facebook users. It was nice to focus on what the company did well instead of all the drama surrounding its bankers.
Lee did some math and found out something super interesting about Facebook! Since way back in 2009, about half of all Facebook users have been logging in every single day. That's a lot of people checking their accounts regularly!
While other tech companies are having a tough time keeping their daily active users to monthly active users ratio low, Facebook's numbers are way up there. What's even more surprising is how steady that ratio has been over time. Even when users get mad and protest changes on the site, the ratio stays pretty much the same. It's gone up in the past year and is now at 28% as of March.
It's like Zuckerberg has found the perfect balance for running his company. Could this ratio be the key to predicting success on the internet? Starting a new tech company is always a gamble, but if you have a strong plan in place, focusing on the number of users who come back every day might be the most important thing to consider.
I think knowing how to make habits stick is super important for startups to be successful. When people get into a routine with a product, they're more likely to keep using it. And when lots of people are using a product regularly, it usually means the business is growing fast. So, if a company has a lot of daily users compared to monthly users, it's a good sign that their product is really popular. I would choose to invest in a business with a high ratio like that over a competitor. Let me explain why:
The bigger the better
When you're talking about starting a new website or app, having a lot of daily active users compared to monthly active users is super important. Just look at Facebook - even though MySpace and Friendster were already popular, Facebook was able to beat them because they had more people using their site every day. It's not just about how many users you have, but how often they're using your site or app.
This is all about the idea that more is better when it comes to getting people to use a product or service. When a lot of people are using something, it can lead to even more people using it, which is pretty cool. According to D.Skok, who writes about this stuff on his blog, the key to getting more people to use something isn't just how many people share it, but how quickly they do it. The faster people share something, the more users it can get. For example, if it takes 2 days for 20,470 people to start using something, but only 1 day for over 20 million people to start using it, that's a big difference! So, the faster people share something, the more users it can get.
When more people use an app every day, it helps the app spread faster. This happens because daily users do things like sharing photos more often. Also, when there are more daily users, there are more people to join in and respond to invites. This cycle keeps going and speeds up when there are a lot of daily users compared to monthly users.
Developing in just one way
Two groups of people love talking about technology. Some think it's more important to get as many users as possible, even if they don't use the product much. Others think it's better to make sure users like the product before trying to get more of them. I think this is a silly argument. If you only have one of those things, you're not getting anywhere.
Okay, so let's talk about how many people are using a certain app or website. It's super important for a company to get more users to stay in business. Companies that are run by engineers enjoy figuring out how to get more users. They even have a cool title called "Growth Hacker" in Silicon Valley. They like to make small changes to see how many more people start using their product. It's like getting instant feedback on their startup idea.
Focusing only on getting more users without keeping them interested can be tricky. Peter Thiel, who teaches at Stanford, explained that the way you get more users tends to follow a certain pattern. Just like how most businesses rely on one main way to make money, they also usually have one best way to get more users. This way is usually way more effective than any other method. The problem is, when everyone figures out the best way to get more users, it's easy for them to copy it. For example, when Facebook first started, they got a lot of new users by having people import their email contacts. But soon, other companies started doing the same thing.
When other companies start copying what you're doing, it's a good thing! It means you're onto something that works. But it's even worse when you come up with a cool way to get more people using your app or website, only to have them lose interest because there's not much to keep them coming back. This has happened with things like ringtone companies, silly Facebook games, and some of the popular video-sharing apps today. It's like having a leaky bucket - you're getting lots of people to try it out, but they're not sticking around because there's not enough to keep them interested.
If you want to make a successful business, having a good way to get customers is super important, but it's not enough on its own. Usually, you'll only have one main way to get customers, and it won't be a big secret. You'll also need something else that makes your business stand out from the competition.
Making the most of User Engagement
Unlike distribution channels, user engagement doesn't follow a strict pattern. It's the little details of how users act that can make a big difference, just like what happened with Facebook's competitors back in the day.
Finding out what users want and making them form new habits is done by carefully watching them and trying different things until you get it right. It's not easy and it takes time, but by paying close attention to how they think and act, you can figure out what they need even before they realize it themselves. It's all about understanding your users better than they understand themselves.
Figuring out how to get people to use your app or website is super important. Some companies, like Zynga, use Facebook ads to get users. But they also have some secret tricks up their sleeves that they only figure out through testing. They collect a ton of data to make their games more fun and keep people playing. Quora gets a lot of users from Google searches, but people also talk a lot about why they love the site. Instagram shares pictures on social media to get more users, but the founders understand what makes people want to use their app. They even studied psychology to figure it out!
Have you ever wondered why it's so hard for companies to copy each other's designs? Well, it's because the little details that make a product successful are often hard to see from the outside. Even if a competitor knows that a product is popular, they might not understand why. Successful products are made up of lots of small improvements that add up to a big advantage. So, even if you think you know what makes a product great, it's not always easy to replicate.
Let's talk about iPhones and Androids. You know how when you use an iPhone, it just feels easier and more fun than using an Android? Well, that's because iPhones are designed well and are more user-friendly. Most people prefer iPhones over Androids because of this. Google, who makes Androids, knows this too. They try to make their phones as good as iPhones, but they can't quite figure out why people love iPhones so much. It's like trying to copy someone's homework without understanding how they got the answers. So, even though Androids have some good things about them, they just can't beat the iPhone when it comes to being easy to use and enjoyable.
Creating habits is a whole different ball game compared to growing a business quickly. It's like a mix of art and science, blending psychology and design. These are tricky skills to master, and it takes time to get the hang of them. Sometimes, when trying to design habits, things can get lost in the shuffle between what the founders want and what can be done.
When companies get people hooked on their products fast, they have a big advantage. People keep using the product, even if there are better options out there. Sometimes, even if a product isn't the best, people will stick with it because they're used to it (like Apple fans). People can only use so many services at once. If a lot of people are using one service every day, they won't have time to use other services.
One cannot exist without the other
If you want people to keep using your app or website, you need to make sure more and more people are finding out about it. Just having a cool product isn't enough - you need to have a plan to spread the word and get more users. If your product doesn't have a way to grow and reach new people easily, it will stay small, and not many people will know about it. So, it's important to think about how to get your awesome service in front of lots of new users so it can take off.
Starting a successful company means getting lots of people to use your product and keeping them interested. You need to have a bunch of active users who are excited about what you're offering. It's important to pay attention to how many people are using your product every day (DAU) and how many are using it every month (MAU). By focusing on these numbers, you can improve your chances of making your company a hit.
