Lately i watched an episode of a tech related series named ‘Silicon Valley’ by HBO, the Season 3, Episode 9 was titled “Daily Active Users”.
What is Daily Active Users (DAU) ?
By definition: Daily active users (DAU) is a way used for measuring success of an internet product, like apps and games. It consist on measuring the amount of users that are actually using the app, not only those that installed it.
In simple words, Daily active users metric is important to determine the number of users that do understand the product and understand how to use the product, and end up using it frequently.
DAU have became more important with the advent of smartphone and the shift towards the mobile internet.
‘Silicon Valley’ by HBO, the Season 3, Episode 9
During the episode 9 of the series, the startup team have seen a huge number of downloads for their “pied piper” compression app, half a million to be precise, the only problem is that the DAU was very low, it had around 16 000 daily active users, which is way under what would be considered bad, or 1/5th of the users.
see more about daily active users ratio calculation <<
These numbers come after a failed attempt of a video ad. (some examples of failed video ads).
To remedy this situation, the startup wanted to run a customer study, to understand the “why” behind people not getting the idea, and not becoming active users.
Thus the founder enlisted the services of a market research firm , the firm ran several focus group to determine what was wrong with the app. They soon realized that people did neither get the idea not how to use the application (desktop & mobile).
The User engagement or daily and monthly active users is a real problem in tech, for example: Social networking app Path, launched in 2010 and quickly got 1.5 million downloads in 2.5 weeks, but it took it 2 more years to hit 500,000 daily active users.
Other examples of the importance of daily active users can be observed with Social networks Ello and Google+, where number of registered users is far more important than the number of active users.
Explainer Video to fix the issue
So, in the episode, the startup was left with only $697 000 (much more than most startups have), and the founder decided to spend it on outreach, tutorials, user meetups, guerilla marketing campaigns and a very basic animated video.
The problem, is that these guys, and more specifically the founder or CEO, should have outsourced their marketing, and here’s why:
1- They needed an explainer video and they did not even know it!
The users were joining the platform but leaving after not understanding how it works! Thus they did not need to get more users, but rather needed to educate the users.
2- They have engineers mentality not a customer mentality, this will lead to wrong marketing messages, and tactics. Another proof of their weak marketing skills, is that the user interface is none intuitive ! Optimizing the user interface to increase user convergence or use and referrals , now commonly considered as Growth Hacking, is a must for every software as a service product.
3- They have no idea how to target their user-base! They sent beta invites only to engineers instead of sending to average techy person.
4- They overthink and over-complicate their message: they hire an advertising company to create a video Ad, but the ad is absolutely meaningless.
To understand to what level the video ad sucked, just compare it to superbowl ads or other creative ads, and the difference would be immediately clear.
In the series: they ended up buying fake engagement, or fake active users to keep the team from breaking up.
In reality, a startup team that does so many lapses in judgment is not operating in optimal freedom of speech culture.