For many apps, daily active users (DAUs) is the north star metric, the industry standard for measuring business health. But when I talked to Krish Sailam, he shared a perspective I’d never considered. As the former VP of MarTech at Nextdoor (a networking app connecting 100M neighbors), Krish explained why chasing DAUs is often a mirage.
To understand why, you have to look at Nextdoor’s business model. While millions of neighbors use the app for free, the revenue engine is powered by local small businesses (SMBs) who advertise through the app.
Krish’s team did a deep dive to see what their most successful advertisers had in common and find the “success formula” (e.g., the specific habits that helped a local business actually see a return on their investment). They expected to find a high correlation with daily active users, assuming that the more often a business owner logged in, the more likely they were to invest in ads. Instead, the data showed the opposite.
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