Activation Rate is a Vanity Metric Without Time Constraints

Imagine a Sales VP telling you:

"We have a 100% close rate!"

You ask: "Wow! How long does it take?" He says: "Infinity. We never mark a deal as lost. Eventually, everyone buys."

You would fire him. Yet, this is exactly how most Product Managers measure Activation Rate.

"We have a 40% activation rate!" Great.

• Does that mean 40% activate in Hour 1? (Rocket ship).
• Or 40% activate eventually, after 6 months of sales calls and webinars? (Consulting firm).

The Time Bound

You must attach a time constraint to your Activation Rate for it to be useful.

• "Day 1 Activation Rate"
• "Day 7 Activation Rate"
• "Day 30 Activation Rate"

The Decay Curve

If you plot your activation rate over time, you get a Decay Curve.

• Hour 1: 20% activated.
• Day 1: 30% activated.
• Day 7: 35% activated.
• Day 30: 36% activated.

Notice the flatline. The difference between Day 7 (35%) and Day 30 (36%) is negligible. This tells you: "If they don't win in the first week, they are dead."

Tivalio's Approach: The "Validity Window"

We encourage you to set a strict Time Horizon. "We count Activation only if it happens within 14 days."

If a user wakes up in Month 6 and activates, that's great! Take their money. But exclude them from your Product Metrics. They are an anomaly (a "Zombie" user). If you optimize your product for Zombies, you will kill the living.