What are onboarding and activation, and how do I measure mine?

Where the two words come from

In 2007 Dave McClure's slide deck Startup Metrics for Pirates listed five steps in a customer's life: acquisition, activation, retention, referral and revenue. His slide describes activation as users enjoying their first visit, a happy user experience. The tools that count it now define it more tightly.

Onboarding is the plain name for the first screens and steps a new user goes through. Apple's design guidance on onboarding, written for apps and games, says that ideally people understand a product simply by using it, and that where onboarding is needed it should be fast, fun and optional.

How to pick your own activation moment

No tool can pick it for you. Amplitude calls activation a business decision about your product, and gives two rules for choosing.

PostHog's documentation adds that the moment can be a count as well as a single action. For its own session replay product, it counts a user as activated once they have watched at least five replays.

1. Write one line that says what your product exists to let someone do.
2. Name the first action inside the product that proves it happened: a sent invoice, a finished practice test, a published page. Not a login, and not a page view.
3. Set a window, such as seven days from signing up. The length is your choice. Keep it the same every week.
4. Write the rule down as one sentence, for example "activated means sent a first invoice within seven days of signing up", and leave it alone for a month.

How to count it by hand, before any tool

You need two lists from your own database: who signed up, and who did the action. A spreadsheet is enough.

1. Take everyone who signed up in one week.
2. Wait until the window has closed for the last of them.
3. Mark each person yes or no: did they do the action inside the window?
4. Divide the yes count by the number who signed up, and multiply by 100. That is the activation rate for that week.

Then count the steps in between, because those steps are your onboarding. An example with made up round numbers, for a product that sends invoices:

The activation rate is 20 percent. The biggest fall is the first one, where 20 of the 50 never confirmed their email, so look there first. With numbers this small, one person moves the rate by two points, so read the rows as well as the rate.

Mistakes a new founder makes with it

• Calling a signup activation. A signup shows that someone pressed a button. The share of visitors who sign up is a conversion rate, which is a different number.
• Picking a screen instead of an outcome. Amplitude's documentation says many teams use a stand in that does not represent value, such as a page view.
• Treating a pattern as a cause. The same page warns that a behaviour found alongside staying does not prove it causes staying. Keen users may simply do more of everything.
• Asking before people have tried. Apple's guidance says to let people experience a product before asking them for ratings or purchases.
• Reading use as money. Using a product and paying for it are different steps. On Prep66, an exam preparation site, not one of 31 free accounts ever went from using the free plan to the checkout page. Signups that never pay tells that story.

Where it matters

Activation sits between two other numbers. Before it comes the conversion rate from visitor to signup. After it comes retention: whether the people who activated are still there later. When people sign up and few activate, they are leaving inside sign up and onboarding, not on the landing page. Nobody is signing up treats those as two different problems.

On Google Ads, Meta Ads or Reddit Ads you pay for the traffic whether or not anyone activates, so count activation by the source each signup came from. A source whose signups never activate deserves a hard look before you spend more on it.

How Sami uses it

Sami works from the numbers you give it and the records AskSami keeps. Signups, clicks and drop offs come from a small snippet that your own coding tool adds to your product, from a prompt Sami writes, each tied to its source where the snippet recorded one. A count you make by hand and give to Sami is kept as a dated record too.

When there is no number on record, Sami says so, and it never invents a figure. AskSami is not an analytics dashboard: AskSami beside analytics tools says what each does. When the fix to your onboarding is code, Sami writes the instructions for your own coding tool to run. AskSami never writes to your code.