Compound Growth Rate measures the average weekly rate of growth over a defined period of time.
In the context of app downloads, compound growth rate refers to how the number of people downloading an app increases over time, taking into account not only the initial downloads but also the downloads that happen in subsequent periods.
Let's say a new app is released and it gets 100 downloads in its first month. This is the initial growth. Now, let's assume that in the second month, it gets 10% more downloads, which would be 110 downloads.
In the third month, it gets another 10% increase, which would be 121 downloads, and so on. Each month, the number of downloads is calculated not only based on the initial number but also on the previous month's downloads.
This is important for app developers because it helps them understand how popular their app is becoming over time. It also helps them make predictions about future growth, which can be important for planning things like server capacity, marketing strategies, and potential revenue.
In the world of apps, achieving compound growth is a very positive sign, as it indicates that more and more people are discovering and using the app, which can lead to a larger and more engaged user base.