Rethinking activation in 2024

Rethinking activation in 2024

Rethinking activation in 2024

As your user volume grows, you must redefine how you think about activation.

Note: This was originally posted within internal Y Combinator forum based on speaking to over 40+ founders at YC B2B companies.

Every company has thought about PLG for a brief moment in 2023. Many tried it as an experiment (when they shouldn't have). Some realized the growth it unlocked changed the trajectory of their company.

But getting users to self-serve and sign up isn't the end. It's just the beginning. Now they're thinking about how to optimize their offering and have tough conversations about retention, activation, and conversion.

How most teams think about activation 🚫

  • Define a metric they care that they want all of their users to perform

    • Something like “Video Created” or “Video Shared” (if you’re Youtube)

  • Measure how many users are actually doing these actions

  • Track the conversion of this funnel

  • Launch experiments that get users to perform those actions and improve funnel conversion

    • Could be in-app tours, sending emails, making it easier to discover that feature during onboarding, etc…

We thought that we had activation figured out. A few months after launch, we realized that the definition was no longer valid across the entire user base.
It was only applicable for less than 15% of the user base.

- Deepak (Fini, YC)

This works fine in concept but poses two major flaws ⚠️

  1. You could end up picking the wrong activation metric (since you’re likely guessing)

  2. Make the mistake of assuming all users have the same activation metric and take the same path to convert

Here’s how to think about activation ✅

  • Figure out what success means at a higher level

    • Put another way, how do I know a given user is finding value from the product

    • This means you can still likely still care about how many “Video Created” events are sent

  • Use this metric to find all users who have done these actions in the past

  • Then analyze what other events are they performing before they perform the action you care about

  • You’ll likely realize two things at this point:

    • Bunch of actions need to happen before they hit the activation metric you care about

    • And this differs by users so you can’t launch a single experiment hoping to address this across the board

    Now the hard part (but the ROI is there): 💰

    • Find all the users who haven’t performed the activation metric you care about

    • Cluster this user groups based on their similarity (combination of user/company properties and events they’ve performed so far)

    • Find the 5 largest ones to address for now so you should have 5 paths in total (1 for each cluster)

    • Launch targeted experiments that get users from path A → B → N (systematically so you can measure the impact of each subsequent step)

    • Repeat

You can do the same thing for retention/conversion as well (change the target metric to something like “Plan Upgraded” or similar event).

To summarize

The way you need to think about activation has to evolve. Your users rarely take the same path to convert and your experiments need to reflect that.

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