
Ask HN: Can you shed some light on calculating growth? - hn-growth
I&#x27;m looking for some help with growth rates. I&#x27;m trying to calculate the monthly growth rate for my app. Over the last year we went from 300,000 to 1,200,000 total user sessions. However, on a monthly basis, we had approximately 75,000 sessions completed, and it stayed consistent throughout the year. While on one hand we&#x27;ve quadrupled our total usage, on the other hand our growth has remained flat each month. The key question here is this - when we talk about  monthly growth, are we normally talking about cumulative usage or monthly increase in usage?<p>Based on the “rule of 72” it seems that quadrupling over the course of a year corresponds with a 12% monthly growth rate.<p>source: http:&#x2F;&#x2F;daslee.me&#x2F;monthly-growth-and-the-rule-of-72<p>On the other hand, each month our usage stayed flat - 75,000 sessions were completed each month. From one perspective, we had 0% growth, as each month our numbers were the same. However, from the perspective of one year, we quadrupled the total number of sessions.<p>Is our monthly growth 0% or 12%?<p>Any feedback on this would be helpful. Thanks!
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jordanthoms
Sorry, but cumulative metrics (which is what total user sessions are) aren't
very useful. To quote from
[http://a16z.com/2015/08/21/16-metrics/](http://a16z.com/2015/08/21/16-metrics/)
: "Cumulative charts by definition always go up and to the right for any
business that is showing any kind of activity. But they are not a valid
measure of growth — they can go up-and-to-the-right even when a business is
shrinking. Thus, the metric is not a useful indicator of a company’s health."

The more useful metrics are over a time period - like the sessions per month
one. Looking at percentage growth over time for a cumulative metric seems
pretty meaningless actually - among other reasons, it can never be negative
even if your business just tanked.

Monthly Growth usually refers to the growth in a monthly metric per month, and
would be 0% in your case.

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ucaetano
"Over the last year we went from 300,000 to 1,200,000 total user sessions."

Over what period of time? (1) 300k sessions in the previous year to 1.2M
sessions this year (2) 300k TOTAL SESSIONS SINCE THE BEGINNINGS OF TIME
(TSSBOF) in Jan 1st last year to 1.2M TSSBOF in Dec 31st last year

If the answer is (2), you should have seen and average of (1.2M - 0.3M)/12 =
75k sessions per month. If you saw that number every month, then essentially
growth in sessions per month is zero.

The means that looking forward, unless something changes, your app will
continue to have 900k sessions per year.

You just need to be clear on what you're measuring and what matters the most?
The TSSBOF? Or the total sessions per month? I'd go with sessions/month.

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confiscate
Based on my (limited) understanding, when one says "monthly growth rate", it
means the delta between months. Hence, it is NOT the cumulative version.

It should be easy to see why--if you take the cumulative version, then by
definition growth delta will always be 0 or positive. Even if you shut down
your app next month, growth would be "0", which doesn't make sense, since your
app is closed and you turned away 100% of your users so the delta in that
(extreme) case would be -100% and not "0". "0" growth means there was no
change in users between month.

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xivzgrev
Agree you got to look @ monthly.

Now if you show some growth and want to calculate the growth rate, CMGR
(compound monthly growth rate) is your best friend!

[http://www.investopedia.com/terms/c/cagr.asp](http://www.investopedia.com/terms/c/cagr.asp)

Do this: 1) X = # of sessions in october 2014 2) Y = # of sessions in october
2015 3) CMGR (compound MONTHLY growth rate) = (Y / X) ^ (1/12)-1

Here's an example: X = 100 Y = 200 CMGR = (200/100) ^ (1/12) - 1 = 5.9%
monthly growth Double check...100 * (1.059)^12 = 199...damn rounding :)

Hope that helps!

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MalcolmDiggs
Think in terms of a car:

Growth metrics usually measure velocity, not speed. They don't measure the MPH
that you're traveling, they measure how fast you accelerate from one speed to
another.

So in your example, the speed you're traveling (75k sessions per month) is
staying constant (you're not accelerating), so your velocity (growth rate),
month over month, is zero.

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Mz
If I am reading you correctly, you are not growing. Usage is flat. So: 0%

