👋 Hey, it’s Sundar! Thanks for reading experiMENTAL: my newsletter helping founders and marketers navigate the CRAZY world of consumer tech with secrets from 10+ years in Marketing at Uber & others.

In today’s newsletter, you’ll learn:

• How MAU is 4 metrics wrapped in one and why that’s important

• How to track MAU to increase visibility

• How to add 4 metrics for quick diagnosis

Apologies for the delay in sending this email. I know it’s usually in your inbox on Tuesdays but I had to help a friend move and couldn’t ship as promised.

The MAUse Trap

MAU is a very common metric and for social networks it’s often their Northstar metric (read more about Northstars).

The problem is that most don’t know that it’s actually a composition of 4 metrics.

If you don’t break it down, you fall into what I call a MAUse trap.

The biggest reason companies fail is they churn more than they retain.

They need to replace everyone churning causing CACs to skyrocket.

It becomes a death spiral.

By unpacking MAU into 4 metrics, you identify trouble zones and proactively address them.

The 4 metrics

MAU = Newly active + Continuing active + Churned + Resurrected

Also, reminder that an “Active user” can mean many things. It’s up to you to define that.

Newly active

These are all the users that were active for the first time ever in that month.

This doesn’t mean only those that signed up in that month. It can include users who signed up a year ago but just became active that month.

Continuing active

All users that were active last month who continue to be active this month.

Churned

All users that were active last month who are not active this month.

There are many ways to define churn, but for social networks where MAU is most relevant, they have low churn windows. Churn is on the order of days/weeks and not months.

Be careful not to confuse reporting churn which is what we’re doing here with actual definitions of churn using data science.

Resurrected

All users that were not active last month who are active this month.

The same caveat from Churned applies here. Defining them as “churn” last month may not be scientifically accurate. In the next section I’ll share how to use ratios to help you understand what’s going on.

Here’s a helpful little chart:

How to properly track

Most MAU dashboards look like the one above. They’re simple a calculation of how many active users are active in a given month.

At a glance, it’ll always look it’s going up and to the right 📈. It’s a vanity play.

Here’s what you want your MAU chart to look like:

A stacked MAU chart in my opinion is the best way to track.

This also forces a visual that shows the size of the churned cohort which most people forget .

I’d recommend overlaying a normal MAU line to see MAU growth if that’s helpful.

Take it one step further with a series of calculations.

_last = last month.

_this = this month.

First, we’ll define everyone that was active last month:

Then, we look at how many of those continue to be active this month.

The opposite of the Continuing Active Rate is the churn rate. It’s how many people were active last month are not active this month.

We also want to know the resurrection rate. This is the rate at which people come back to be active on our platform that were not active last month but were previously active.

And finally, we calculate what % of our MAUs are from Newly Active users. It’s fine to be high at the start of your company but over time you want a stable base of continuing users. Otherwise, it signals a reliance on new acquisition.

With these 4 ratios, you can identify patterns and have a quick but strong understanding of why your MAU has gone up or down for the month.

Recap

That’s it for this week, friends! Some key takeaways:

• MAU is a great Northstar metric but don’t fall into a MAUse trap

• Break down MAU into 4 sub metrics to have better visibility

• Calculate 4 key ratios so you can quickly diagnose issues

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