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 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.