Does that number even matter?!
In this blog, I share some learning thoughts on what numbers are important and what numbers aren’t, especially when it comes to the value of a product, like Snapchat.
Is that the number that really matters? DAU. Yep oh the holiest of metrics in the tech world. Are they back yet? Have they returned today yet? WHAT! They haven’t… let’s send them a push notification. Onboarding? Screw Onboarding… this is so easy anybody with a college computer science degree can do it.
You laugh. But conversations that align just to that above happen every day. I mean every day. If you are confused by some of the abbreviations above, no worries. I’ve listed them out here if you want to dive deeper, but not necessary for the point of this article)
So, let’s think and play with some numbers for a second. Snap recently announced its IPO filing. Exciting time, nonetheless. Snap will be public soon, their valuation is through the roof, but more importantly… journalists and investors scan scour one of the most secretive tech companies when it comes to a daily consumer product for many individuals. Let’s dive into some of these numbers being touted around. Snap has around 161 million DAU’s (Q4 2016) and then we bring in Instagram, which is reporting 400 million DAU’s with 150 million DAV’s (Daily Active Viewers of stories) … yea I know the acronym world is wild. We have also recently seen these graphs floating around regarding Snapchat’s decrease in growth with the onset of Instagram stories.
Ouch, a growth that went from consecutive double digits to single and then 3.2%! It’s not beautiful, but does it matter?
To some yes.
WHY? Because that’s how they measure Snap’s success. They measure the success of Snapchat on the ability to growth and increase DAU. One could easily argue that their MAU isn’t “crazy” different from their DAU. But I’d say that argument would fall flat for what Snapchat is and does. It’s a communication channel. The DAU and MAU probably around massively different when you look at other communication channels either. Email, Slack, SMS, WhatsApp, etc. But then what? Do I think Snap is failed and can’t defend itself from the social behemoth that is Facebook and Instagram. No. There is something different there.
DAU isn’t the most important metric.
Yep, you heard that right. DAU is a nice and shiny metric. One that you should have a pulse on as a leader in the company, but not the end-all-be-all for the evaluation of Snap. I think this is a good time to remind you that Snap is much more than Snapchat. The technology encompassed in Snapchat is AR, messaging, user profiles, and much more. The wearables side of Snap, which just gave birth to Spectacles is also just a beginning. Snap has many deals in the pipeline for entertainment as well. (Tech Tip: If you want to know what some tech companies are doing next. Look at their job boards. Snap has been hiring for all types of entertainment partnership-type positions recently.) I don’t think Snap will directly compete with Netflix, but I do see content developed specifically for Snap coming in the not-to-distant future.
It’s the interaction
The real thing that matters with Snap is that DAU is a metric, that’s it. The amount of interaction they get out of that interaction is more important than someone opening a snap once a day. Think about opening a snap every hour, half hour, dare I say 3 minutes? Take a watch of the user behavior of some youth and even generation x users that have figured out Snapchat and I think you can understand what matters. The interaction is what matters. That’s especially important when you look at Snapchat. The core interaction model for Snapchat hasn’t changed. Send and Receive disappearing messages. Period. That’s the same thing again and again, packaged up in their (what designers quote as) less-than-desirable User Interface.
Snap is banking on the interaction and the absolute shift in communication patterns it has brought with it as the key metric that will drive strong growth. And to be honest. If they can squeeze that medium-sized pie extra tight and not lose its consistency. There is no reason to make the pie any bigger until they are ready.
— Austin
This post was originally published on AustinSandmeyer.com February 9th, 2017.
