Measuring Out Your Life By Daily Users (Filed #007)

I’ve always wondered whether a company was relevant if it wasn’t engaged in some rivalry with its industry’s 800-pound gorilla. Everyone has competition but there comes a time when you have to hit above your weight class, so to speak. In tech, Apple, Google, Facebook, Microsoft, and Amazon are often the target and skirmishes are bound to occur. This week, I wanted to focus on one, in particular, involving Microsoft. No stranger to these battles, the Windows-maker has entered into a row with Slack over which one has a larger number of daily active users: the former announced that it has 20 million DAU while the latter had 13 million.

A measuring contest? Understandable that companies use this metric as a sign of growth, but look deeper to understand its meaning. For one, how did Microsoft get those users—was it organically or did they come from a pairing of its Teams software with Office 365 which has 200 million users? Or did it come from those migrating from Skype for Business? Furthermore, not all companies are the same so while Microsoft can tout 20 million users, many will probably come from large enterprises while Slack is likely made up of smaller businesses.

“Where does that leave us, the observers? In something of a muddle,” the former Crunchbase News editor-in-chief and Filed reader Alex Wilhelm told me. “We need one more set of DAU results from the companies to better understand the current trend of DAU growth; if Microsoft continues to pull ahead, it can take the leadership crown at least in terms of usage. If Slack can narrow the gap, we’ll return to the argument of how much A is needed to constitute a real DAU.”

Slack isn’t taking this slight lying down, publishing a blog post saying that not all daily active users are created equal and the real metric to look at is engagement":

DAUs get cited a lot, but what, really, is their significance? In our book, the “U” is what matters: Use! Engagement is what makes Slack work — you can’t transform a workplace if people aren’t actually using the product. And we love the people building apps and integrations on the Slack platform, because they help drive that engagement.

If you’re looking at the number for a company, ask if it’s really an apples-to-apples comparison? This doesn’t just apply to Microsoft and Slack, but also to Facebook versus TikTok, Snap, Twitter; Google and Apple; Box and Dropbox; and many others. DAUs are a closer indication into a company’s growth direction, much more than monthly and looking just at that specific business, it can be an indicator of progress (or not), but when using it to slam on a competitor, much more detail is needed to back up any type of claim.

But one thing is for certain, in a battle between publicly-traded competitors, the bragging about DAU can have an impact on stock price as it did when Microsoft dropped its news—Slack’s stock slipped more than 8 percent.

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P.P.S.: Due to the Thanksgiving holiday, next week’s Filed will be pre-empted by family gatherings. We’ll return back to our regularly scheduled programming the following week.

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