The one metric Nextdoor prioritizes over everything else

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.

The advertiser accounts all shared one common trait: Their success had little to do with how often they opened the NextDoor app. It was all about their engagement depth. As Krish explained to me, the obvious first step for any business is "claiming their page." This is the moment an owner verifies their business on the map and takes control of the listing. To a lifecycle marketer, this looks like a massive conversion win. But for Nextdoor, that claim was just the baseline. It didn't mean the business owner was actually ready to be a partner.

The real signal was the manual work that followed. The businesses that moved the needle (and saw a return on their ad spend) were the ones that took the time to fill out their profile, upload their logo, add photos, and define their hours of operation. These accounts signaled more monetization propensity than any number of logins.

It may seem like they uncovered one interesting detail about a user group. But this core insight shifted the entire strategy. If you know that your most successful customers have one trait in common, you can move away from vanity metrics to instead drive the core behaviors that lead to LTV for your business.

At Nextdoor, they realized that the deeper engagement they could drive, the higher the chances were that the business would become an advertising partner and remain a long-term partner. By focusing on "setting up shop" rather than "logging in," they could identify the businesses with the highest intent and subsequently, the highest likelihood of success.

Marketers often focus on engagement (logins, clicks, sessions) because it’s the easiest data to track. But engagement doesn't always lead to monetization. The job of a lifecycle team isn't just to make active users, it’s to make successful ones. For Nextdoor, that means delivering a world-class product experience to the end user and helping SMBs grow.

It’s great to see active users, but sometimes marketers get tunnel vision, focusing on a narrow lens of what good looks like. Focusing on what deeply engaged users have in common can trigger a lightbulb moment, one that leads to more realized business value, and ultimately, better outcomes for the end-users, who are in it for the long haul.