The Value of Activation Rate and the Importance of Curation

The Value of Activation Rate and the Importance of Curation

In today's digital landscape, user engagement and retention are crucial factors for the success of any product or service. One metric that can provide valuable insights into the effectiveness of user onboarding and long-term value delivery is the activation rate. But what exactly is a good activation rate?

Activation rate is defined as the ratio of users who hit your activation milestone to those who completed your signup flow. A good activation rate should be highly predictive of long-term value delivery to the user, which can be reflected in long-term retention, monetization, or both. In other words, users who hit your activation milestone should retain at a rate at least 2x better than those who do not complete the activation step.

However, it is important to note that activation should not be seen as the ultimate goal of a user's journey. Instead, it should serve as a leading indicator of a new user sticking around and eventually becoming a customer. This distinction is especially relevant for SaaS products, where the average activation rate is around 36%, with a median of 30%.

To truly measure the effectiveness of activation, it is essential to define the milestone in a way that showcases the value of your product. Simply completing the sign-up flow might not be enough to demonstrate the unique benefits your product offers. Instead, consider setting a milestone that occurs early in a user's lifecycle and strongly correlates with long-term retention.

It is worth noting some examples of successful activation milestones from well-known companies. For Facebook, the activation milestone is defined as having seven friends within the first ten days of signing up. Twitter considers the act of following 30 people as the activation moment, while Dropbox requires users to upload at least one file. These milestones not only demonstrate the value of the respective products but also set users on a path towards long-term engagement.

While activation rate is a powerful metric, it is not the only factor that determines the success of a product or service. Another crucial aspect is curation, which involves the process of finding, selecting, and contextualizing meaningful and relevant information in a world saturated with an overabundance of data.

Curation, at its core, is a form of creative and intellectual labor. It requires a curator to have a drive to navigate through the vast maze of information and identify what truly matters and why. As Joanne McNeil eloquently puts it, a good curator is not only focused on acquisition and selection but also on contextualizing the curated content.