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Early on, watch only retention
The trouble with MAU
Teams that pick monthly active users as their metric tend to game it, and end up with terrible retention alongside monster acquisition. At some point gravity catches up, because acquisition cannot overwhelm churn forever, and the numbers collapse.
Retention asks the one question that matters early: did the company build something people keep using? Beyond that, a clear North Star is enough, a plain statement of what the company is about and what it wants to achieve.
Goal before metric
The North Star is the goal, and a metric only describes it. A metric never describes a goal perfectly and is always broken in some way, which is why the goal has to be clear first and the metric chosen to describe it as well as possible.
Why can't acquisition outrun churn?
A product that gains a fixed number of new users each month while losing a fixed share of its base settles at a ceiling. If it loses 10 percent of its users every month, the base levels off near ten times the monthly additions. Product teams often draw this as a leaky bucket, where the water level stops rising once the flow out equals the flow in.
How do teams spot product-market fit?
Retention is usually charted by cohort, tracking what share of the people who joined in a given week are still active after one week, two weeks, and so on. A curve that bends and then flattens above zero means a group of users is staying, while a curve that slides to zero means they all leave. Sean Ellis proposed another test, a survey in which at least 40 percent of users say they would be very disappointed if the product disappeared.
Why do metrics break once they become goals?
British economist Charles Goodhart noted in 1975 that a statistical relationship tends to collapse once policymakers put pressure on it for control. Anthropologist Marilyn Strathern restated it in 1997 in the form now known as Goodhart's law: a measure that becomes a target stops being a good measure. People adjust their behavior to hit the number, and the number stops reflecting what it was meant to track.
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