Execution: DAU vs MAU
TL;DR - In this piece, I talk about some of the pitfalls of the Daily Active User Metric in product case interviews. I cover the definition of active, the DAU vs WAU choice and why DAU vs MAU is so crucial.
DAU. WAU. MAU. They have become buzzwords. Daily Active Users. Weekly Active Users. Monthly Active Users.
At a high level, they are engagement metrics. They help product leaders measure how many people use their product daily, weekly, and monthly. These activity metrics help measure how relevant and helpful a product is to users. If one uses a product regularly, this activity signals to product teams that they are fulfilling a need, completing a job for a user.
The majority of candidates I work with use DAU as a memorized buzzword but can’t tell me why they use it to measure success beyond the word engagement (that they often use more as buzzword than they should).
Active - First, let’s talk about the A in DAU. It stands for active. You should NEVER mention DAU without defining active for your listener. Is active:
Opening the app?
3 comments per session?
Marking a task complete?
Sharing at least one story?
Active depends on what your product does and what healthy behavior is on a platform. Understanding your goal will help you understand what is a good measure of active.
Minimum Time Period - DAU vs WAU, when do you say DAU vs MAU? A general rule of thumb is 60% or more of your users are active by that time period. Outside of the most common social apps, your are more likely looking at WAU. Just think about it, does Amazon have a DAU or WAU metric? More likely Weekly not Daily. Don’t just blindly state DAU. Think before you speak.
Use Both Short-Term & Long-Term Behaviors - You want to look at both DAU and MAU or WAU and MAU because it will help you better understand retention. Looking at your ratio of DAU to MAU over time and by cohort can help you identify early retention issues.
The aforementioned rules will help you talk about engagement and retention metrics for the quintessential execution question: “How do you measure success.”
While I have focused on where people make mistakes, don’t let it stop you from using engagement metrics in a case. Just do so appropriately. A good engagement metric is a healthy measure for not just engagement but also retention. If you retain users they drive revenue. If you retain revenue in the short term but not engagement, you should start to worry that you are no longer solving a need for your users. Viral Loops, Content Loops, and Paid Loops all require engagement to remain healthy and productive as engagement leads to retention which leads to new acquisitions. It is a foundational metric but use it appropriately with thought and not just reflex.
If you feel strongly that other issues with DAU vs MAU arise, ping me intrico.io@gmail.com. I welcome the debate.
