It's All About the Trend

This post was originally published in 2012 on the Startup Grind blog, I'm republishing it here for archival purposes, also, my wife gave birth to our second child this week so there was no way I was going to have the time to write a new blog post :)

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I was quite surprised to read all the negative comments about Milk shutting down Oink1. The gist of the armchair quarterbacking is Oink had lots of users and so Milk should be obligated to support it into perpetuity because, well, they never gave a good reason.

Social apps are hard! When you launch a social app like Oink you need to have a great growth story almost from day one. Sure, Oink grew quickly on the strength of Kevin Rose and Daniel Burka's much deserved reputations, but after the dust settled, I'm guessing their true growth rate settled into a pretty consistent linear rate and they realized, rightly so, that this will never be a phenomenal success, and so they decided to move on, I applaud that.

You need to watch your growth trend line carefully, Ben Silberman, a few weeks years back talked about how Pinterest grew 50% consistently month over month. This is a great growth rate2. Even though it still takes a few years when you start with a small user base (in Pinterest's case, it was about 200 users) you are adding radically more users each month than the one before it, this is what you want.

I'm guessing Oink was the exact opposite, after their initial pop, I bet growth settled into something more regular and less impressive. They managed to quickly get 150,000 or so users, and then their true growth rate settled at maybe 5-10,000 new users a month, this is the nightmare scenario.

Most people--that have never tried to build a venture backed social app--probably think growing by 5-10,000 users a month is awesome, and if you were charging money for something, it probably would be, but for a free social product where users are considered revenue, a linear growth rate is the first knock at your door by the Grim Reaper. Starting from a user base of 150,000, and growing at 10,000 user a month, it would take about 7 years to get to a million users, still think that's good growth?

Now let's look at exponential growth. Starting with 200 users, and growing 50% every month, it will take just shy of 2 years to hit a million users, and if your growth rate stays around 50%, that's when your growth would really start to take off, adding hundreds of thousands, and then millions of users each and every month. See the difference?

Remember, Milk was a free product, its users were its revenue, and its revenues weren't growing fast enough to make the company viable. I think it's great the whole Milk team recognized they had a bad growth trend line and chose to move on3, those kind of actions should be commended, not ridiculed.


  1. Oh no, this post isn't dated at all /sarcasm 

  2. I used this same example in my 2013 Startup Grind presentation 

  3. Remember, this was originally written before Milk was acquired by Google and Rose was a VC.