Activation & onboarding review

To: Omar, Head of Product From: PM, Onboarding Date: September 2024 Subject: Onboarding Review & Activation Strategy

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1. What Activation Should Mean for Us

Currently, our definition of activation—completing a checklist of cosmetic preferences (name, theme, savings goal, notifications)—is flawed. It measures vanity completion rather than value realization.

As a personal finance app, Tidepool delivers core value when users connect their financial reality and engage with it. Looking at our August cohort (4,000 sign-ups), the data tells a clear story about Day 60 retention:

• Checklist completers retain at 30.4% (742/2,438).
• Bank connectors retain at 48.2% (964/2,000).
• Users who categorise 10+ transactions retain at 64.5% (891/1,380).
• Users who do BOTH (Connect + Categorise) retain at 78.0% (842/1,080).

Recommendation: We must redefine "Activation" from “completed the setup checklist” to “Connected a bank AND categorised at least 10 transactions within their first week.” This anchors our success metric to actual product utility, shifting our focus from cosmetic setup to establishing long-term financial habits.

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2. The Evidence: Where We Are Losing Users

Our current funnel drops off steeply: 1. Sign up: 4,000 (100%) 2. Setup checklist: 2,440 (61%) 3. Connect a bank: 2,000 (50%) 4. Categorise 10 transactions: 1,360 (34%)

The biggest leak is bank connection (dropping 11 percentage points right after the checklist) and transaction categorisation (dropping another 16 points).

Interestingly, the checklist itself acts as a barrier. Users are spending cognitive load on naming accounts and picking themes before experiencing the core product. Meanwhile, power features like "Created a budget" (33% retention) and opening the app 4+ days are strong secondary indicators, but bank linking and categorisation are the undisputed gateways to retention.

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3. What to Change in Onboarding

To drive our new definition of activation, we need to restructure the first-time user experience (FTUX):

• Kill the upfront setup checklist: Strip out non-essential steps (naming accounts, picking themes, notifications) from the critical path. Move them to profile settings or prompt for them after value has been proven.
• Accelerate time-to-bank: Move bank connection immediately following sign-up. Users downloaded Tidepool to see their money; let them see it instantly via Plaid/Aggregator integration.
• Gamify the "aha" moment: Guide users smoothly from bank connection directly into categorising their first 10 transactions. Use smart auto-categorisation with a clear, frictionless bulk-approval or swipe UI to make reaching the 10-transaction milestone effortless.

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4. Verdict on the Design Proposal and Next Quarter's Goal

The Design Team’s Proposal (Celebration screen + Progress bar): * Verdict: Reject in its current form. Adding a progress bar and celebration screen for the existing checklist optimizes the wrong metric. It puts lipstick on a superficial activation loop. * Pivot: If we redesign onboarding to focus on connecting a bank and categorising transactions, then we can use a celebration screen and progress bar—not to celebrate picking a theme, but to celebrate linking an account and hitting that crucial 10-transaction milestone.

Next Quarter's Goal (Raise checklist completion from 61% to 75%): * Verdict: Abandon this goal. Optimizing checklist completion is a local maximum that misaligns product and user success. Chasing 75% checklist completion will likely result in higher drop-offs further down the funnel and flat-to-declining Day 60 retention. * New Goal: We should replace this with a target to raise our true activation rate (Bank Connected + 10 Transactions Categorised) from the current baseline (~34%) to 50% next quarter. This directly correlates with our actual business health and user retention.

Onboarding review: activate on financial value, not setup

Recommendation: Replace checklist completion as our activation metric with connecting a bank and categorising at least 10 transactions within seven days of signup. Reorient onboarding around that outcome. The celebration screen and progress bar are secondary; making the current checklist more engaging risks improving the wrong metric.

What activation should mean

For Tidepool, activation should mean a user has taken the first meaningful steps toward understanding their spending—not finished configuring the app.

Bank connection brings their financial data into Tidepool; categorisation makes that data useful. Together, these are our strongest available proxy for experiencing core value. This is a working definition, not proof that exactly 10 categorisations creates a lasting habit. We should validate the threshold and whether users actually understand something useful about their money.

Budget creation can follow that first insight. The evidence does not support making it a mandatory activation requirement today.

What the evidence says

Among August’s 4,000 signups, overall day-60 retention was 28%.

The checklist has weak separation: completers retained at 30.4%, versus 24.2% for non-completers. Its 61% completion rate is therefore a poor headline measure of delivered value.

By contrast, only 27% of signups connected a bank and categorised 10+ transactions, but they accounted for 842 of 1,120 retained users—75% of everyone retained. Users who did not achieve both retained at 9.5%.

These are observational associations. More motivated users may both complete these actions and remain active; we cannot promise 78% retention simply by pushing people through them. Behaviour groups also overlap, so the reported steps should not be treated as a strictly sequential funnel. Before testing, reconcile the rounded onboarding figures with event counts and standardise the day-60 activity definition.

What to change

1. Remove configuration as a gate to value. Defer theme selection and account naming; make savings goals optional. Request notification permission when there is a clear benefit, such as a relevant budget alert—not as checklist work.

1. Bring bank connection forward. Explain why access is needed, what data is used, and how users retain control. Instrument connection starts, provider errors, unsupported banks, abandonment and successful imports. Preserve a skip/retry path rather than forcing consent.

1. Guide users from imported transactions to spending insight. Offer a short, low-effort review of suggested categories. Let users confirm or correct them, then show an understandable spending summary. Do not require ten arbitrary manual edits merely to satisfy the metric.

1. Offer a budget as the next useful action. Use the spending summary to suggest a realistic starting budget, rather than asking users to invent one before seeing their finances.

Test the redesigned flow against today’s onboarding. Measure seven-day activation first, then downstream retention; monitor connection failures, abandonment and user-reported trust and usefulness.

Design proposal and next quarter’s goal

A progress bar is worth testing if it tracks meaningful steps toward understanding spending. It should not encourage completion of low-value setup tasks. A celebration screen belongs after a genuine milestone and should reinforce the insight gained, not interrupt access to it. Neither should take priority over bank-connection and categorisation friction.

Replace the 61% → 75% checklist goal with a goal for the new activation definition. I propose 27% → 35% within seven days, provisionally, subject to instrumentation validation and early experiment results. That is a planning target—not a forecast supported by this dataset.

Keep checklist completion as a diagnostic. Judge success by increased meaningful activation without sacrificing trust or retention, and confirm the retention effect once next quarter’s cohorts mature.

Onboarding review: what activation should mean

To: Omar | From: Onboarding PM | Data: August cohort (4,000 sign-ups), day-60 retention

Summary

Activation is flat because we are measuring the wrong thing. Finishing the setup checklist barely predicts whether someone stays. Connecting a bank and categorising 10+ transactions in week one does predict it strongly. I recommend we redefine activation around that, rebuild onboarding to get people there faster, and replace next quarter's checklist goal.

What activation should mean

Activated = connected a bank AND categorised 10+ transactions in the first week.

This is the moment Tidepool delivers its core promise: seeing where your money goes. Only 27% of August sign-ups reached it, so our real activation rate is less than half the 61% we report.

The evidence

Day-60 retention by first-week behaviour (baseline: 28% of all sign-ups retained):

Five things stand out:

1. The checklist is a weak signal. Completers retain at 30% versus 24% for non-completers, close to the 28% baseline. 1,696 people completed it and still churned.
2. Bank plus categorisation is the strongest signal. Users who did both retain at 78%. They make up 27% of sign-ups but 75% of everyone retained at day 60.
3. Each half is weak on its own. About 920 people connected a bank without categorising, and they retained at 13%. About 300 categorised without a bank, and they retained at 16%. The value comes from real transactions that the user has made sense of.
4. The biggest leaks are at the steps that matter. Half of sign-ups never connect a bank. Of those who do, 46% never reach 10 categorised transactions.
5. Budget creation isn't a good activation metric. Its retention lift is small and only 31% do it. That is worth investigating separately for a budgeting app.

Caveats: this is one cohort and the data is correlational. Motivated users may simply do more of everything. The gaps are large enough to act on, but we should confirm cause with experiments rather than assume it.

What to change in onboarding

1. Put bank connection first. Today it comes after a four-item checklist that we lose 39% of users on. Naming the account and picking a theme add no value at signup and can move to settings. Ask for notifications later, once there is something worth notifying about, such as a first spending summary. The savings goal becomes optional after categorisation.
2. Make connecting a bank feel safe and fast. Address security concerns at the moment of asking, with plain-language reassurance about read-only access. Offer the most popular banks up front. Instrument the drop-off between starting and finishing the connection, which we can't currently see.
3. Guide the first 10 categorisations straight after connecting. Show recent transactions with suggested categories so each one is a one-tap confirm. End with an immediate payoff: "Here's where your money went this month."
4. Recover people who stall. Send a reminder to anyone who connected but hasn't categorised within 48 hours. That group is about 920 people a month retaining at 13%.

Each change should ship as an A/B test with day-60 retention as the outcome. That is how we confirm the relationship is causal.

The design team's proposal

A celebration screen and a progress bar are reasonable patterns, but aimed at the checklist they would polish a step that doesn't drive retention. I'd ask design to point the same ideas at the new milestone:

• A progress bar for "connect bank, then categorise 10 transactions."
• A celebration on the 10th categorisation, paired with the first spending insight.

That is a small redirect of their work, not a rejection of it.

Next quarter's goal

I recommend we retire the 61% → 75% checklist goal. Even if we hit it, and every extra completer gained the full 6-point retention gap (which is generous), that would mean roughly 30–35 more retained users per 4,000 sign-ups.

Compare moving just 10% of sign-ups (400 people) into the bank-plus-categorised group. If even a fraction of that 68-point retention gap is causal, the payoff is several times larger.

Proposed goal: raise week-one bank connection plus 10+ categorised transactions from 27% to 35%, with day-60 retention as the guardrail metric. We should set the final target once the first experiment shows how much the metric moves.

Next steps

• This week: confirm the new activation definition with you and analytics, and backfill it for June and July to check it holds across cohorts.
• Weeks 2–4: run an A/B test of bank-first onboarding with the checklist deferred, and add instrumentation to the bank connection flow.
• Weeks 4–8: test the guided categorisation flow and the redirected progress bar and celebration screen.