Diagnose a retention problem

To: Leo (Head of Growth) From: PM, Activation Subject: Hold on doubling paid spend — our flat WAU is an activation and win-back issue, not summer seasonality

Leo,

Before we double paid acquisition, we need to look closely at what is happening beneath our top-line WAU. While it looks like a summer slump, the data shows our flat WAU (~52,000) is actually caused by two product and lifecycle changes from August: the Week 5 onboarding change broke new-user habit formation, and the Week 6 win-back campaign is masking that core retention drop with temporary, low-intent resurrected users.

Doubling paid spend right now will pour expensive acquisition into a leaky bucket. Here is the diagnosis and what we should do before scaling spend.

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1. Why it’s not summer seasonality

If summer weather and holidays were driving our flat WAU, we would see a broad dip across all users in July and August, followed by a recovery in September. Instead: * Pre-Week 5 cohorts are rock solid: Users who signed up in Weeks 1–4 retained at ~30% by Week 8 (hitting late August and September) with zero seasonal decay. * Retention is still worsening in late September: Our weekly churned users rose from ~7,100 in early July to 10,279 in Week 13 (Sept 28). Meanwhile, our core `retained_users` (active both this week and last week) have steadily eroded from ~45,000 in Weeks 1–4 down to 41,636 in Week 13.

2. Root Cause #1: The Week 5 shorter sign-up broke long-term activation

In Week 5 (Aug 3), we removed the goal-setting step ("What do you want to achieve, and how many days a week?") to cut sign-up time from 3 minutes to 1. Sign-up completion jumped from 61% to 74%, and Week 1 retention ticked up ~3 percentage points (from ~55% to ~58%).

However, long-term cohort retention collapsed immediately starting with the Week 5 cohort: * Week 4 Retention: Dropped from ~33.8% (Weeks 1–4 cohorts) to ~24.7% (Weeks 5–9 cohorts)—a ~9 percentage point drop. * Week 8 Retention: Dropped from ~30.0% (Weeks 1–4 cohorts) to 19.9% (Week 5 cohort)—a one-third relative loss in long-term retained users.

Why this happened: Stride’s core value is a weekly workout plan. By removing the step where users state their goals and target workout days, we likely broke the mechanism that personalizes their weekly plan and anchors their habit commitment. Furthermore, cutting friction let through lower-intent users who curious-click in Week 1, skewing Week 1 retention up while failing to build a multi-week habit.

The Math: Even with a 21% boost in sign-up completion (61% $\rightarrow$ 74%), a 33% relative drop in Week 8 retention (30% $\rightarrow$ 19.9%) means every 1,000 visitors to our sign-up flow now yields ~19% fewer long-term active users than before Week 5.

3. Root Cause #2: The Week 6 win-back campaign is inflating WAU and churn

Why hasn’t WAU fallen if core retention is down? Because in Week 6 (Aug 10), lifecycle launched the 21-day inactive win-back email offering a free week of Premium: * Resurrected users spiked: `returningusers` jumped from ~990/week (Weeks 1–5) to ~2,600/week (Weeks 6–13)—adding ~1,600 temporary users per week. * They immediately re-churn: Lifecycle data shows only 12% of win-back users remain active two weeks later (compared to 41% of organic returning users). Once their free week of Premium ends, nearly 90% (~1,400 users/week) churn right back out. * This explains why weekly `churnedusers` spiked from ~7,400 in Week 4 to >9,100 in Week 6 and >10,300 by Week 11. We are propping up headline WAU by cycling ~1,600 promo-chasers in and out of the app every week while our true core base (`retained_users`) shrinks by ~3,200 users.

(Note: When we increased paid social by 25% in Week 9, new users grew, W2–W4 cohort percentages held steady at the post-Week 5 levels, and `retained_users` still dropped by another ~500 users over the next four weeks.)

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What we should do before scaling acquisition

1. Hold off on doubling paid acquisition (and revert the 25% Week 9 increase if CAC is inefficient): Right now, 80% of new sign-ups churn by Week 7. Doubling spend at current retention rates will burn budget for a fraction of the LTV we were getting in July. 2. Restore goal-setting to the activation flow (this week): We need to A/B test bringing back the goal and frequency questions immediately: * Variant A (Control): Current 1-minute sign-up. * Variant B (Revert): Original 3-minute sign-up with goal-setting. * Variant C (Deferred Onboarding): Keep account creation fast, but require the goal-setting & weekly schedule commitment immediately before the user starts their first workout or generates their first weekly plan. * Success metric: Net retained users at Week 4 per 1,000 top-of-funnel visitors (not sign-up completion or W1 retention). 3. Fix the win-back mechanic: Giving a free week of Premium to unactivated users doesn't build a habit. We should shift the win-back hook from a temporary paywall unlock to re-establishing a weekly plan (e.g., "Let's reset your weekly schedule—pick 2 days to work out this week"), and track `retainedusers` separately from win-back `returningusers` in our growth reporting.

Once we see Week 4 cohort retention recover back above 32%, we should turn the paid acquisition tap all the way up.

Leo — I wouldn’t double paid acquisition yet. We have a retention leak, not just a summer growth slowdown. More new users and campaign-driven returns are masking deteriorating retention. The clearest break coincides with the week-5 onboarding change, though we need an experiment to establish causality.

What’s actually happening

Weekly actives remain around 52,000 because inflows are replacing increasingly large losses:

New users rose 30%, but weekly churn rose 44%. The share of the prior week’s actives retained fell from approximately 86.3% to 80.2%. In week 13, 10,482 new and returning users barely exceeded 10,279 churned users: net growth was just 203.

Flat actives are therefore concealing a less durable user base.

The evidence points to an activation problem

1. New cohorts look better initially, then retain substantially worse. For signup cohorts 1–4, first-following-week retention averaged 55.1%; for cohorts 5–12, it averaged 58.0%. But by the fourth following week, retention falls from 33.8% for cohorts 1–4 to 24.8% for cohorts 5–9. At eight weeks, the earlier cohorts retain roughly 30%, versus 19.9% for cohort 5.

That is not simply fewer people trying Stride. More are getting through the front door, but fewer form a lasting habit.

2. The break aligns with removing goal-setting in week 5. Shorter signup raised completion from 61% to 74%, but removed the step asking users what they wanted to achieve and how often they would exercise. For a habit app built around a weekly plan, that step may have helped users commit to a relevant routine.

The timing makes this our leading hypothesis—not proven causality. We should also check acquisition mix and other changes. However, the paid-budget increase occurred in week 9, after the cohort deterioration began. “Summer” alone does not explain this sharp onboarding-aligned break.

3. Win-back is propping up the headline metric, not repairing retention. Returning users jumped from about 1,000 to 2,600 a week when emails launched in week 6. Yet only 12% of email-driven returners remained active two weeks later, versus 41% of earlier organic returners. These are different populations, so this is not a causal campaign comparison, but it clearly warns against treating every return as durable recovery.

What we should do before spending more

1. Hold acquisition spend steady while testing onboarding. Randomize the current short signup against a lightweight goal-setting step that produces a personalized weekly plan. Preserve the speed improvement where possible.

1. Optimize for durable activation, not signup completion. Make four-week retention a primary outcome, alongside first workout, plan adoption and repeat workout behavior. Measure retained users per signup and per signup starter so a longer flow cannot “win” merely by filtering people out. Track Premium conversion as a guardrail.

1. Locate the failure point. Segment cohorts by acquisition channel, campaign and onboarding exposure. Compare where users stop: before their first workout, after one workout, or when beginning the next weekly plan. Reconcile the signup and new-active counts before calculating acquisition efficiency.

1. Judge win-back on incremental lasting activity. Use a randomized holdout and measure two- and four-week retention, not email-driven returns alone. Test messages that restore a realistic plan rather than relying only on free Premium.

Decision: scale acquisition once we demonstrate improved multiweek retention and acceptable acquisition economics. Doubling spend now risks buying more users into a leaking habit loop—and making flat actives look healthier without fixing the underlying problem.

To: Leo, Head of Growth From: PM, Activation Subject: Diagnosis: Why WAU is flat (and why doubling paid acquisition right now will burn cash)

Leo, you suggested doubling paid acquisition to push through flat summer WAU. I’ve dug into the numbers, and the data tells a different story.

Weekly actives are flat (averaging ~52,000 for 13 weeks), but sign-ups are up 30% (from ~6,000 to ~7,800). The issue isn't seasonal churn—it's that our onboarding changes broke cohort retention, and our win-back campaigns are masking the leak.

Doubling down on paid acquisition right now will just pour more water into a bucket with a widening hole. Here is the diagnosis, the evidence, and what we should do instead.

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1. What’s actually happening?

#### A. Onboarding optimization created low-intent users (Week 5) In Week 5, we removed the goal-setting step to cut sign-up time from 3 minutes to 1. Completion jumped from 61% to 74%, and sign-ups grew.

However, look at the cohort data (`weeklysignupcohorts.csv`). For Cohorts 1–4 (pre-change), Week 1 retention hovered around 55%, and Week 4 retention was ~34%. From Cohort 5 onward, Week 1 retention jumped to ~58% (thanks to frictionless sign-up), but Week 4 retention cratered from ~34% down to ~25%.

By removing goal-setting, we optimized for top-of-funnel conversion at the expense of user intent. We are acquiring users who don't know why they are here or what plan fits them, leading them to drop off heavily by week 4.

#### B. Core retention is quietly declining Look at the growth accounting data (`weeklygrowthaccounting.csv`). Total `retained_users` (users active week-over-week) dropped steadily from ~44,800 in Week 1 to ~41,600 in Week 13, a loss of over 3,200 loyal weekly actives.

#### C. Win-backs are masking the bleeding So why is WAU flat if retained users dropped by 3,200? Look at `returning_users`. From Weeks 1–5, returning users averaged ~980 per week. Starting in Week 6 (when the win-back email launched), returning users spiked to ~2,600 per week.

The win-back campaign is successfully dragging churned users back, propping up our headline WAU. But it’s a leaky bucket: lifecycle data shows that only 12% of win-back users are active two weeks later (compared to 41% of organic returning users). They churn right back out.

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2. Why "Summer" isn't to blame

Your theory about summer (outdoors, holidays) would manifest as broad seasonal churn across all cohorts. But our data shows: 1. Older cohorts (1–4) maintained stable long-term retention. 2. The drop in retention is strictly tied to Cohort 5 onwards—the exact week we shipped the shorter sign-up flow.

It is product-led churn, not seasonal.

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3. What we should do instead of doubling paid acquisition

Before we scale ad spend, we need to fix activation and stop relying on expensive band-aids. Let’s execute a 3-step pivot:

1. Re-introduce intent-matching to onboarding (without hurting conversion): We need to qualify users so they receive the right weekly plan. Instead of a heavy 3-minute form, let’s test a lightweight, single-tap goal selector or defer personalization to the end of the first workout. We must restore Week 4 retention from 25% back toward 34%.
2. Refine the win-back targeting: Pumping win-back emails to all churned users after 21 days is bringing back low-intent users who churn in 14 days. Let’s restrict win-backs to users who reached a milestone or completed at least 3 workouts before churning, matching the profile of our 41% organic returners.
3. Optimize the Week 3–4 activation loop: We shipped 40 new routines in Week 3, but post-onboarding drop-off is neutralizing it. We need to focus activation efforts on guiding new users to these routines before they hit the Week 3 cliff.

Bottom line: Let's hold off on doubling paid acquisition for 4 weeks. If we fix the onboarding leak and improve post-signup intent, organic growth + recovered retention will naturally push us past our WAU plateau without wasting ad dollars on leaky traffic. Let's sync on this today.