LV Insights

User retention can either make or break businesses

The Dubsmash story has been nothing shy of a rollercoaster ride. Back in 2014, Dubsmash was founded in Berlin as a lip-syncing app that allowed users to play any audio track in the background and shoot an act, mimicking some incident, quoting any famous movie dialogue, or even singing a song. The concept was new, centered around entertainment, allowed users to exercise their creativity, and most importantly share the same on various social media platforms. Dubsmash was an instant success – hitting 50 million downloads across the globe. The founders raised funds, expanded the team, business functions, and focused on enhancing the features of the product, all within six months of going viral. Every time a big star like Jennifer Lopez and footballer Neymar put out a Dubsmash, downloads would shoot through the roof and media headlines made it seem like everything was A-Okay!

Even as the team and features on the product grew, Dubsmash founders Jonas Druppel, Tim Specht and Suchit Dash could see the writing on the wall – numerous new users were onboarding Dubsmash every time there was a ‘big hit’ but only a fraction of them were returning back. User retention and engagement were a big problem and one that the founders could see was eating them alive. 

Tough times, tough calls – in 2017 the founders of Dubsmash let go of all their employees in Berlin, shut down their office and headed to the United States to rebuild their business again.  From scratch. 

“There was a time when we considered moving our business to India, but we barely understood the Indian marketplace. There were many use cases and at that time we were not ready to address them all. Also, TikTok was on the verge of venturing into the Indian markets back then, and we were not well-equipped to compete with them,” Suchit Dash, co-founder of Dubsmash. 

Rediscovering Product/Market Fit

The team now focused on one thing – product and engineering. They realized that the secret to retaining users is building a product that focused on their interests. Dubsmash was now engaging with customers on a regular basis to understand their behavior and expectations. 

“This generation of users connects first on social media platforms. We wanted to enable a platform where people with similar entertainment interests could have come together,” says Suchit. For a light-weight entertainment app like Dubsmash, uniqueness was key – they had to ensure that content was being created on their platform. The team scaled their TAM down from a global audience to the US market solely, that too around teenagers. Around 40% of the users were creating content on their own, and these numbers were good. “While the older version of Dubsmash had a monthly user retention rate of 2 people, this new version was retaining around 40 users,” mentions Suchit. 

Today Dubsmash is doing good – 1 billion views per month on its videos, and ranked #2, only next to TikTok in the United States. The company has recently raised a decent fund from General Catalyst Partners and seems to have ridden the storm and survived! But the competition is tough. With TikTok having taken over the globe and YouTube & Facebook launching products on similar lines, Dubsmash is focused on dominating the US markets by enabling teenagers to perform lip-syncing and create dance videos on the platform. The company engages with users and takes continuous feedback to improve the platform. 

In a webinar with LetsVenture, Suchit shares the story of Dubsmash. He talks about the things that worked for Dubsmash, and the ones that did not. Suchit also explains how one can arrive at their north star metric in a crisis. “For any consumer-based business, user retention is the north star metric. Does the business have the legs to retain consumers during and after a crisis? If the answer is yes, you are good to go!” says Suchit. 

Here’s the full webinar: 

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