A note from Daniel

Retention rate is the closest proxy for future revenue (if your product is designed for repeat usage). Absolute "Active users" can be misleading if your user base is constantly growing either due to some marketing campaign running or other means. Because then you always see your "Active users" metric is growing. But not sure why and if you are on the right direction. The same goes for "Churn rate". That's why you need to measure them per cohort of new users/feature release/marketing campaign and not absolute numbers. I personally think the most important metric of all for a pre-PMF: "Retention Rate" per cohort of users. The percentage of users who continue using your product or service over a given time period. With that you can see if a new feature set, a new marketing channel, messaging, or a new target market made a meaningful impact on your results. And then act accordingly.

Daniel Collection Of Practical Business Advice · July 20, 2023 Save to shelf
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