Metrics tend to play a middling role after a social-media company is established. With a few notable exceptions, most sites hit a peak then flatten out. The same can be said for open-source projects. There are peaks, but really what you want is consistency in the numbers. Hyper-growth is not sustainable and you will eventually saturate the addressable market.
One of the things open-source projects tout is their number of downloads. Download metrics are often very flawed but can help tell the story of how big the market potential is. Social-media companies talk about their number of registered users. Neither talks much about retained users unless the metrics are very impressive.
As I was reading Jeremy Liew's blog today, I realized the models of adoption of open source and social media are very similar:
-Test drive (installation)
Andrew Chen, who originally created the model, had these eye-opening (and very logical) conclusions:
-Early on, the growth of the curve is carried by the invitations.
-However, over time the invitations start to slow down as you hit network saturation.
-The retention coefficient affects your system by creating a "lagging indicator" on your acquisition--if you have good retention, even as your invites slow down, you won't feel it as much.
-If your retention sucks, then look out: The new invites can't sustain the growth, and you end up with a rather dire "shark fin."
-Things look great at first, but if you can't retain users long-term, then you don't have a business.
My top three takeaways:
-You need adoption, but retention matters more.
-Consistency in adoption will lead to higher degree of retention (statistically, the spikes are most likely anomalies and will skew your perspective.
-It's very easy to jump the shark.
Disclosure: Jeremy Liew works for Lightspeed Venture Partners, an investor in my company.