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Weekly Actives Grew 10 Percent While Retention Fell: Diagnose with Growth Accounting
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A weekly dashboard shows weekly active users (WAU) of 100,000 in week 1 and 110,000 in week 2. The growth accounting for the two weeks is:
| New | Resurrected | Churned | |
|---|---|---|---|
| Week 1 (versus week 0 base of 100,000) | 10,000 | 4,000 | 14,000 |
| Week 2 (versus week 1 base of 100,000) | 30,000 | 4,000 | 24,000 |
The product team celebrates the 10 percent growth; the retention analyst says "the product is getting worse".
- Verify the arithmetic and compute, for each week, the share of the previous week's base that was retained and the quick ratio.
- Who is right? Explain what happened to the base.
- List the next 4 analyses you would run, and what each would tell you.
- What would you put on the weekly dashboard so this cannot be missed?
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