Activation & onboarding review

To: Omar (Head of Product) From: PM, Onboarding Subject: Onboarding Review: Redefining Activation and Q4 Strategy

Executive Summary

Our current activation metric—completing the setup checklist (61%)—is a vanity metric. Analysis of August’s 4,000 sign-ups shows that users who complete the checklist retain at Day 60 at roughly the same rate as the overall average (30.4% vs. 28.0%). Worse, the checklist sits before our core value proposition, causing 39% of users to drop off before we even ask them to connect a bank.

We need to redefine activation around real product value, scrap the current Q4 checklist goal, and redesign onboarding to get users straight to their financial data.

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1. The Evidence: What Actually Drives Retention?

Activation should measure the moment a user experiences Tidepool’s core value ("see where your money goes") in a way that predicts long-term habit formation. Looking at Day 60 retention from August’s cohort (4,000 total sign-ups), the data is clear:

• All sign-ups: 28.0% D60 retention (1,120 / 4,000)
• Completed setup checklist (61% of users): 30.4% retention (742 / 2,438)
• Created a budget (31% of users): 33.3% retention (410 / 1,230)
• Opened the app 4+ days (55% of users): 39.9% retention (870 / 2,180)
• Connected a bank account (50% of users): 48.2% retention (964 / 2,000)
• Categorised 10+ transactions (34% of users): 64.6% retention (891 / 1,380)
• Connected a bank AND categorised 10+ transactions (27% of users): 78.0% retention (842 / 1,080)

Key Takeaways from the Data: 1. The setup checklist does not predict retention. Doing administrative chores (naming an account, picking a color theme) does not deliver financial clarity. Users who skip or abandon the checklist aren't failing to activate; they are likely just bored. 2. Core value is delivered through bank connection and transaction categorisation. When a user connects their bank and categorises 10+ transactions in week one, their Day 60 retention jumps to 78.0%. Notably, this 27% of users accounts for 75% of all retained users at Day 60 (842 of 1,120). 3. Crucial caveat on Bank vs. Manual: Notice that 1,380 users categorised 10+ transactions, but only 1,080 did so and connected a bank. For the 300 users who categorised 10+ transactions without connecting a bank (presumably via manual entry or CSV), D60 retention was only 16.3% (49 / 300). Categorising alone isn’t enough; automated bank syncing is essential.

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2. Redefining Activation & Next Quarter’s Goal

• New Activation Definition: "Connected a bank account AND categorised 10+ transactions within 7 days of sign-up."
• Verdict on Q4 Goal: We must cancel the goal of raising checklist completion from 61% to 75%. Even if we hit 75%, D60 retention wouldn't budge.
• New Q4 Goal: Increase true activation (Bank + 10 Categorised Transactions) from 27.0% to 38.0%. Because this cohort retains at 78% (though we should monitor for slight dilution as we push less-motivated users through the funnel), moving this needle is the highest-leverage way to lift overall D60 retention above 28%.

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3. Assessment of the Design Team's Proposal

The design team proposed adding a progress bar and a celebration screen to the setup checklist. We should not build this for the current checklist.

Optimising a step that adds friction without adding value is wasted effort. However, we should repurpose the design team’s UI patterns for the Categorisation step. A progress bar ("4 of 10 transactions categorised to unlock your spending breakdown") and a celebration screen that immediately reveals their visualised spending insights will directly drive our new activation metric.

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4. What to Change in Onboarding

Right now, our funnel is backwards: we ask for customization before showing value. We should restructure the flow as follows:

1. Kill the upfront setup checklist: Remove "name your account" and "pick a theme" from onboarding entirely (default these and move them to Settings). Delay "set a savings goal" and "enable notifications" until after the user has seen their spending data, when those prompts actually have context.
2. Make "Connect a Bank" Step 1: Immediately after sign-up, prompt bank connection. Currently, we lose 50% of users here (many because they dropped off at the checklist first). Moving this to Step 1—and adding trust signals around security and read-only access—will immediately increase the top of our true value funnel.
3. Guided "First 10" Categorisation Flow: Once the bank syncs, drop users into a focused, swipe/tap experience (using Design's progress bar) to categorise their 10 most recent transactions, culminating in an immediate "Aha!" dashboard showing where their money went this month.

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.

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.