Activation & onboarding review

To: Omar From: PM, Onboarding Re: Onboarding review

Summary

Our activation metric is measuring the wrong thing. Completing the setup checklist is 61% of sign-ups, but it barely separates users who stay from those who leave: 30% of completers are retained at day 60, against 24% of non-completers. The behaviours that matter are connecting a bank account and categorising transactions. Users who do both are retained at 78%. Users who do neither are retained at 6%. I recommend redefining activation, putting bank connection at the centre of onboarding, and reshaping the design proposal around it.

What activation should mean

Activation = connected a bank account and categorised 10+ transactions in the first 7 days.

Baseline: 27% of August sign-ups (1,080 of 4,000). This definition reflects the core value (seeing where money goes), is the only combination with a large retention gap, and is measurable from event data.

Evidence

Four things stand out:

• Bank connection and categorising are complementary. Each alone yields 13–16% retention; together they yield 78%. The value appears only when both happen.
• The biggest fixable leak is after bank connection. 46% of users who connect a bank never categorise 10 transactions.
• Budget creation is weak in week one. Its retention (33%) is barely above the 28% baseline, so it shouldn't define activation yet.
• App-open frequency is an outcome, not a cause. It's a useful engagement metric, but users who are already activated open the app more.

These are correlations. Users who do more are probably more motivated to begin with, so the 78% overstates the causal effect. We need experiments to confirm the lift, but the gap is large enough to act on now.

What to change in onboarding

1. Make bank connection the first real step. Only half of sign-ups connect, and the cosmetic steps (name, theme) come first. Move bank linking up, explain the payoff ("see where last month went"), and reduce friction: clear read-only reassurance, and recovery paths for failed connections.
2. Help users categorise 10 transactions quickly. Pre-suggest categories, allow one-tap confirmation, and show progress ("3 of 10: your spending is taking shape"). Target the 46% who stop short.
3. Demote checklist items that don't carry the value. Theme, name, and notifications should be optional. The savings goal is untested in our data, so test it before cutting it.
4. Move budget creation later. Prompt it after the user has categorised 10 transactions, and measure whether that lifts budget creation and retention in weeks 2–4.

The design team's proposal

The celebration screen and progress bar are good craft aimed at the wrong target. A progress bar on the current checklist will push users through theme and notifications faster. That raises the 61% number without touching the steps that predict retention, and may do nothing for bank connection.

The celebration is valuable, but only at a milestone that matters. I'd ask the design team to rebuild the progress bar around the two activation steps (bank connected, 10 transactions categorised), with the celebration triggered when both are done. We test it against the current flow and ship only if activation moves.

Next quarter's goal

Replace "checklist completion 61% → 75%" with "activation (bank connected and 10+ categorised in week one) 27% → 35%."

Sizing: in a 4,000-user cohort, 27% → 35% is about 320 more activated users. At 78% retention, that's roughly 250 more retained at day 60. A checklist point, by contrast, is worth about 10 retained users at current completer retention. Marginal users will retain worse than average, so treat 250 as an upper bound.

35% is ambitious but reachable: it requires bank connection to rise from 50% to about 60%, and categorising conversion from 54% to about 58%. The checklist stays as a leading indicator, not the goal.

Next steps

1. Adopt the new activation definition this week and add it to the onboarding dashboard.
2. Run an A/B test of bank-first onboarding against the current flow.
3. Ask design to rebuild the progress bar and celebration around the activation steps, and test before shipping.
4. Confirm the retention lift with a holdout or experiment, since current figures are correlational.

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.

To: Omar | Re: Onboarding review

Recommendation

Activation should mean connecting a bank and categorising 10+ transactions in the first week. Our current definition, completing the setup checklist, barely predicts retention, so the 61% is flat for a reason: we're measuring the wrong thing. I'd fix the path to the real activation event, use the design team's ideas only on that path, and replace next quarter's goal.

Evidence (4,000 August sign-ups, day-60 retention)

Three things stand out:

• The checklist is a weak signal. Checklist completers retain at 30%, against 28% for everyone. The checklist is theme, notifications, account name and goal, so it's mostly cosmetic setup.
• The combination matters, not either step alone. Backing out the overlaps from the CSV:
• Bank only (no categorising): about 920 users, 13% retained.
• Categorised only (no bank): about 300 users, 16% retained.
• Neither: about 1,700 users, 6% retained.
• Both: 78% retained.

Users who connect but never see their spending sorted do worse than average. The value moment is seeing where the money goes, which needs both steps. - Budgets and app opens aren't the answer. Budget creators retain at 33%, close to baseline. Opening the app 4+ days (40%) is engagement, not a lever we can pull in onboarding.

Caveat: this is observational. Motivated users probably do everything, so these numbers show who retains, not what causes it. The recommendations below are therefore tests, not guarantees.

What to change

The funnel is 100% → 50% connect → 27% connect and categorise. There are two leaks:

1. Half of users never connect a bank, and they retain at 8%. Put bank connection first, straight after sign-up. Move theme, notifications and account name out of the critical path (defer or drop them). Look at where the connect flow fails and whether trust copy (read-only access, security) is needed. I can't tell from this data whether the checklist is causing bank drop-off, so I'd A/B test bank-first against the current order.
2. 46% of those who connect (920 of 2,000) never reach 10 categorised transactions. This is the biggest fixable gap, since 78% of those who finish retain. Auto-categorise on connect, pre-fill best guesses, and walk users through their first 10 with one-tap confirmations rather than leaving them to find the feature.

I'd also instrument the funnel by step and by time, so we can see where in the first week people stall.

The design team's proposal

A celebration screen and a progress bar for the checklist would probably raise checklist completion, but that metric barely relates to retention, so we'd likely see a "win" with no change in retained users. I wouldn't ship them as proposed. Both ideas are cheap and sound, though, so I'd redirect them:

• Make the progress bar track the real path (connect bank → categorise 10).
• Put the celebration at the moment of value, such as the 10th categorised transaction, ideally with a first insight ("here's where your money went").

This is a good way to involve design in the work above rather than rejecting their proposal.

Next quarter's goal

Drop "checklist completion 61% → 75%". Pushing it up could even pull effort toward low-value steps.

Replace it with: percentage of sign-ups who connect a bank and categorise 10+ transactions within 7 days. Baseline is 27%. I'd propose a target around 35%, but that is a judgment call until we've sized the effect of the first experiments, so let's set it after a few weeks of data. Guardrail: day-60 retention among those users should hold near its current 78% (if we widen the funnel with less-motivated users, it may dip, and we should watch that). Track the real outcome, overall day-60 retention (28% today), alongside it.

Next steps

• Run the bank-first vs current-order A/B.
• Prototype auto-categorisation and a guided first-10 flow.
• Work with design on the redirected progress bar and celebration.
• Agree the new activation definition and dashboard before the quarter starts.

I'm happy to walk through the numbers if useful.