
Growth vs. Retention - ghosh
http://avc.com/2015/07/growth-vs-retention/
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koonsolo
How do you know if you have product market/fit? It's great to focus on 90 days
retention numbers, but how high should they be? 0.5%, 1% 5%? I assume 10% is
totally nailing product/market fit, but how low can a number go and still be
considered product/market fit.

Edit: Sorry, I got confused, I'm taking about conversion rate instead of
retention. Sorry for the confusion. But I assume product/market fit is also
measured by conversion and not retention alone.

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patio11
Depends heavily on what you're making.

SaaS sold low-touch with a 30 day free trial followed by a credit card should
have 90 day retention past the credit card in the ~90%ish region _to account
for the high churn rate expected early in the customer lifecycle_ , after
which MTM retention should be about 98%.

The numbers you are quoting sound like they're coming from a free B2C mobile
application to me, where user attention wilts extraordinarily quickly. Even
with that proviso, they feel low.

For a business which is transactional in nature, with plausible repeated
transactions, I've heard numbers in the 25 to 40% range quoted for "good
performance in encouraging first-time customers to use the service again."
i.e. Given 100 orders from distinct new users today we'd like to see 40
distinct customers place additional orders in the next 90 days.

One of the reason Uber is such a great business is that they have
_extraordinarily_ high retention numbers, both in terms of "percent of riders
who will ride again in X time period" and in "number of rides they'll take on
average in X time period."

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koonsolo
Yes, I'm really talking about the ratio going from a website visitor to 90 day
retention user (edit: I now realize this is conversion instead of retention,
sorry about that!). I would think getting users as far as pulling out their
credit card should also be part of the equation. Your value proposition is
part of the product/market fit I would assume.

Retention alone doesn't seem to completely cover product/market fit.

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ThomPete
It kind of does because it helps you establish a fairly predictable gaining
v.s loosing customers. Which then allow you to calculate the cost of
acquisition per customer/user which then in turn allow you to stabilize your
growth.

The goal is that your revenue will help pay for your growth.

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rcarrigan87
I get why retention is important but this article seems very light on details.
A lot of products typically wont see a customer return in 90 days. Are these
bad businesses...?

Let's say you're building a home remodeling marketplace. People aren't doing
remodeling projects every month. Your 90 day retention numbers aren't going to
be great.

Retention would suggest avoiding this business model...

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mooreds
I think he'd suggest finding the retention number that works for you. In your
example, you might have 2 years as a valid retention window for consumers, but
for the contractors you might have less than 90 days depending on the size of
job.

His point seems to be don't ignore churn and focus solely on growth.

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neuigkeiten
I wonder how you would value sites like Rap Genius this way. It is pretty much
an SEO play, so I would expect only a very small fraction of users to come
back.

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rcarrigan87
it's risky to build the core of your business on someone else's platform. You
could argue Quora is doing something similar and I'm just as confused by
them...

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humbertomn
Not sure it's the case with Quora. I'm just guessing here, but I would say
they have high rates of direct visits and many reasons for users to keep
coming back every day (or at least every week) because of quality of content
and some of their gamification elements.

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lukego
Speaking of which: I am having trouble finding the link to opt-out of Apple
Music before the paid period starts. Help?

~~~
iqonik
[http://www.howtogeek.com/221492/how-to-cancel-your-apple-
mus...](http://www.howtogeek.com/221492/how-to-cancel-your-apple-music-and-
other-itunes-subscriptions/)

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littlewing
I would add that employee retention is also a good sign.

