Activation & onboarding review

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

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Executive Summary

Our current activation rate (61%) is flat because we are measuring and optimizing the wrong milestone. Completing our setup checklist barely moves the needle on long-term retention.

To drive retention, we must redefine activation around core product value—connecting a bank and categorising transactions—and reorient our onboarding funnel and quarterly goals to support it.

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1. What Activation Should Mean (and the Evidence)

Activation should represent the “Aha!” moment: the point where a user experiences Tidepool’s core value proposition and forms a lasting habit.

Currently, we define activation as completing the setup checklist (name account, pick theme, set savings goal, enable notifications). The data shows this is a vanity metric:

• Baseline Day 60 Retention: 28.0% (1,120 / 4,000 sign-ups)
• Checklist Completion: 30.4% Day 60 retention (742 / 2,438) — a negligible +2.4 percentage point lift over baseline.

By contrast, actions tied to our core utility (seeing where money goes) dramatically predict retention: * Connected a bank account: 48.2% Day 60 retention (964 / 2,000) * Categorised 10+ transactions: 64.6% Day 60 retention (891 / 1,380) * Connected bank AND categorised 10+ transactions: 78.0% Day 60 retention (842 / 1,080)

Users who complete both core actions retain at nearly triple the baseline rate. In fact, this group accounts for 75.2% of all retained users at Day 60 (842 of 1,120), despite representing only 27% of initial sign-ups.

New Activation Metric: > A user connects a bank account and categorises at least 10 transactions within their first 7 days.

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2. Design Proposal & Next Quarter’s Goal

#### The Design Proposal (Celebration Screen & Progress Bar) The design team’s proposal is solving the wrong problem. Adding progress bars and celebration screens to cosmetic tasks (picking themes, naming accounts) creates artificial friction before users experience any real value. We are gamifying administrative overhead instead of utility.

Recommendation: Repurpose the design team’s work, but attach it to the real value milestone (e.g., celebrating when their first 10 transactions are imported and categorized).

#### Next Quarter’s Goal (Raise Checklist Completion from 61% to 75%) We should retire this goal immediately.

Even if we hit 75% checklist completion, model projections indicate Day 60 retention would increase by less than 1%. Optimizing an arbitrary checklist delivers zero business impact.

Proposed New Goal for Next Quarter: > Increase the core Activation Rate (Bank Connected + 10 Categorised Transactions) from 27% to 40% of sign-ups.

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3. What to Change in Onboarding

Our onboarding funnel currently bleeds users before they experience core value: 50% drop off before connecting a bank, and only 34% categorize 10 transactions. We must clear the runway to value:

1. Eliminate the Cosmetic Checklist from First-Run Flow * Move “pick a theme” and “name your account” to Settings/Profile. * Defer “enable notifications” and “set a savings goal” until after the user sees their financial data.

2. Lead with Bank Connection * Prompt bank linking immediately post-registration. * Pre-frame the security and the payoff clearly: “Connect your account to see your last 30 days of spending instantly.”

3. Accelerate Time-to-Value (TTV) on Categorisation * Upon successful bank connection, immediately import transactions and guide the user through a rapid, swipeable 10-transaction categorisation flow (or auto-categorise and prompt a one-tap review). * Conclude with an instant visual breakdown: “Here’s where your money went this month.” This is Tidepool’s true “Aha!” moment.

4. Contextual Budgeting * Only prompt users to create a budget after categorisation. Budgeting retention is low in week one (33.3%) because users cannot budget accurately without understanding their baseline spend.

Next Steps

1. Align leadership on the new Activation definition.
2. Re-scope the design sprint from checklist gamification to a streamlined "Connect & Review 10 Transactions" flow.
3. Update the team OKR dashboard for next quarter.

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 for Omar

Recommendation

We are measuring setup, not activation. Completing a checklist of preferences does not establish that someone has experienced Tidepool’s value: seeing where their money goes and taking control of it.

Redesign onboarding around that first useful financial insight. Treat the celebration screen and progress bar as supporting elements—not the main fix—and replace next quarter’s checklist-completion goal.

What activation should mean

Use “connected a bank and categorised at least 10 transactions within the first week” as our provisional activation definition.

This combines access to real financial data with an action that helps users understand their spending. It is a stronger approximation of delivered value than naming an account or picking a theme.

The threshold of 10 is a starting hypothesis, not a proven magic number. We should validate whether users actually gain an insight at this point and whether a different threshold or milestone—such as reviewing a spending summary—better predicts durable use. Creating a budget may become a subsequent milestone, but the current evidence does not support making it mandatory for initial activation.

What the evidence says

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

The strongest signal is the combined bank-and-categorisation milestone: 27% of sign-ups reached it, and those users accounted for 842 of our 1,120 retained users. Retention among everyone else was approximately 9.5%.

Checklist completion, by contrast, is associated with retention only slightly above the cohort average. Raising it could improve the reported activation rate without improving users’ outcomes.

These are observational, overlapping groups. Motivated users may both complete meaningful actions and remain active; the data does not prove that pushing everyone through those actions will cause retention. Nor can we infer exact step-by-step drop-off from these aggregates. The CSV also differs slightly from the funnel summary on checklist and categorisation counts; reconcile reporting before setting the baseline.

What to change in onboarding

1. Lead with the value proposition, then bank connection. Explain what users will get from connecting, how their data is handled, and what happens next. Instrument connection starts, failures, abandonment and successful imports; address reliability and trust barriers.

1. Replace the upfront preference checklist with a guided first-value journey. Move theme selection and account naming out of the critical path. Ask for notification permission when there is a clear benefit. Keep savings goals optional or introduce them after users understand their finances.

1. Guide users through real transactions. Provide sensible category suggestions, easy corrections and a short review flow. Then show a useful spending summary—not merely confirmation that ten items were completed.

1. Offer budgeting as the next step. Help users turn their spending insight into a realistic budget, without making budget creation another prerequisite that delays first value.

Measure the full journey and test changes against the existing experience, including first-week milestone attainment and day-60 retention.

Design proposal and next quarter’s goal

A progress bar is worth testing if it tracks meaningful value steps, not cosmetic setup tasks. A celebration screen belongs after the first useful insight, should be brief, and should not interrupt it. Neither proposal addresses the core problem on its own.

Replace “raise checklist completion from 61% to 75%” with “increase first-week bank-plus-10-transaction activation.” A provisional target of 27% to 35% is reasonable to plan against, subject to baseline reconciliation and experiment sizing—not a forecast supported by this dataset.

Success must also include improved day-60 retention, with bank-connection reliability, privacy complaints and abandonment monitored as guardrails. Keep checklist completion as a diagnostic metric, not the team’s definition of success.