Last version published: 08/11/2016 10:09
Publication number: ELQ-49082-2
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Viral and Retention Excel Model
A model to explain: how come and when do apps “jump the shark?” (i.e: when they fall from successful to failure)
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The gist of this computation, when looking at the statistics is:
o At an early stage, the shape of your growth curve is fuelled by the invitations
o Although, as time flies by your number of invitations progressivelys start to slumber at the same time of hitting your "network saturation"
o The retention coefficient has an impact on your system as it creates a “lagging indicator” on your acquisition of new customers – if you have high retention rates, you won't actually notice it as much, even if your invites slow down.
o When your retention coefficient is at rock bottom, be vigilant. Indeed, your new invites can't keep your growth at a steady level and you will finish with a bad looking "shark fin".
Your performance can look great at a first glance, but if you don't have the capacities to retain users on the long-run, then your business is an illusion.
- Andrew Chen, www.andrewchen.co