Growth rate

• 15% a month is good (5x users per year)
• 10% a month is fine (3x users per year)
• 5% probably won't succeed

Organic vs Paid Growth

Organic Growth

• Virality (startup stage) – users introduce product to the new users.
  • Facebook – tag people not yet using FB.
  • Wordle – share to twitter.
  • How to make people want to share something from the app?
• Network Effect – product gets better as more nodes exist.
  • Metcalfe's Law – the value of a network is the square of the nodes in a network.
    • $\mathrm{\Pi }=n(A\times (n-1)/2-C)$\
  • How to make app more valuable with increasing number of users?

Referral schemes

You can pay people to invite new people.

Problems

• Cannibalization – people would subscribe for free, can check in different regions and compare.
• Fraud.

Paid Growth

E.g. pay-per-click, ads.

• Should have good tracking to know where people are coming from.
  • Asking "where you came from" is often the best option.
  • Should keep this data forever and later compare which customers are performing better.
• Should measure how much it costs not only to make person register, but also become an active user.

Unit Economics

How much money you must spend on customers?
Scaling negative unit economics is dangerous.

Retention

What's the right time to measure if user is active? For FB it's daily, for Airbnb can be yearly.

Magic Moment

User behaviour or activity that predicts long term Retention.
If user adds 7 friends on facebook, they'll become a happy user. Showing a popup "Add a friend" as a result.

Net Promoter Score

How likely you are to recommend a product to a friend.
Scale 0-10.
9-10 are promoters, 0-6 are detractors.
NPS is percent of promoters minus percent of detractors. E.g. for (50%, 25%, 25%) it is $50-25=+25$.
+50 is a minimum required.

You must keep it consistent, gather it in a same way always.

Summary

• 15% Month-over-month Growth is the target.
• At least 50% organic is required.
• Track unit economics.
• Retention must flatten of. Look for Magic Moment.
• +50 Net Promoter Score is required.