We see a lot of metrics on web and mobile apps. Our portfolio companies share their metrics with us, which we keep confidential and do not share with anyone outside of our firm. And companies that are seeking investment from USV also share their metrics with us. We also keep these metrics confidential and do not share them outside of our firm.
One thing that never ceases to amaze me is how similar some of the metrics are from service to service and company to company. I like to call these the web/mobile laws of physics. One fairly common “law of web/mobile physics” is the ratio of registered users/downloads to monthly actives, daily actives, and max concurrent users (for services that have a real time component to them).
I call this ratio 30/10/10 and so many services that we see exhibit it within a few percentage points here and there. Here’s how it works:
30% of the registered users or number of downloads (if its a mobile app) will use the service each month
10% of the registered users or number of downloads (if its a mobile app) will use the service each day
the max number of concurrent users of a real-time service will be 10% of the number of daily users
We see these ratios across social web apps, social mobile apps, games, music services, and many other consumer web and mobile services.
Companies can change these metrics in their favour. I wrote a post a while back called “Social Media’s Secret Weapon – Email” that outlines one way that companies change these metrics in their favour. When you see an email that says that someone has tagged you in a photo on Facebook or @mentioned you on Twitter, you are very likely to click on it and go visit the service. That can materially increase the ratio of monthly and daily users to registered users.
Another similar technique is mobile notifications which I also blogged about recently. Seeing an Android notification that a friend has checked into a location near me on Foursquare almost always generates a visit to my Foursquare app.
The best social media companies and services will push these metrics up with engaging features and quality experiences. But when I see a blog post that says “XYZ company only has 30% of their users active every month” like that is some horrible fact, I am reminded how little the market actually knows about the underlying dynamics of these emerging services and how users relate to them. Hopefully this blog post and others like it will help to change that situation.
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