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Nabeel Hyatt, Founder and CEO of Conduit Labs has an interesting post that examines how to predict the success of a Facebook app. Essentially, he looks at the ratio of two metrics made available by Facebook, Daily Active Users/Monthly Active Users (DAU/MAU).

I love it when people dig into the data to find answers - even when they are slightly off like this case! Nabeel's point is that a high DAU/MAU ratio predicts strong DAU growth (DAU counts is how Nabeel quantifies app success) as indicates by the high R-squared value.

Of course this is a bit of a self-fulfilling prophecy as DAU is used to compute the DAU/MAU ratio (the term of this bias I believe is called autocorrelation). Not to say this is a useless exercise. In fact, every entrepreneur should engage in a form of this exercise. The better you understand the key variables that affect your success, the easier it will be for you to devise strategies that directly impact your sucess.

In this case, I would like to see DAU or DAU/MAU regressed against app revenues. I think a person may want to incorporate a lag in those variables). The best thing you could do it collect a wealth of different metrics and use statistics to find the most important ones. I did something similar when I worked at THQ. I built a dataset that helped me identify the key factors that influence a video games revenue and unit sales success for the Kids fighter game genre. The process still can be applied to any situation, but I think it could be very valuable for web-based games where data is very abundant.

I think this would be a really interesting exercise. If anyone has a revenue-generating Facebook app out there and is willing to collect a dataset for me, I would be willing to try to identify the key determining metrics for you. No charge - I just need to know you are willing to put in the time to collect the data. Let me know in the comments.