For Monzo, users who added three friends to their account during signup retained significantly better than those who did not, demonstrating the impact of social features on user engagement.

Retention should be analyzed by looking at cohorts of users over time, assessing how many continue to use your product after signing up.

Tracking customer retention is essential; it helps you understand how many users continue to engage with your product over time, which is a key indicator of success.

To gauge product-market fit, measure how many users return to your product after a week or 30 days, and aim to exceed industry benchmarks for retention.

Retention is a critical metric; it shows how many customers continue to pay over time, indicating the product's value to them.

If your startup has strong network effects, focusing on active users may be more important initially, with revenue becoming a focus later on. It's crucial to define what 'users' means for your startup, as it can vary significantly. For example, having 100 users could mean they just signed up or that they actively engage with your product daily for about 10 minutes. The latter is a much more valuable metric.

For consumer startups, achieving at least 15% month-on-month growth in active users is ideal, with 10% being acceptable, while 5% is likely insufficient for long-term viability.

To effectively measure cohort retention, define how to group new users into cohorts based on when they first used your product, such as weekly or monthly.

Measuring retention is critical; if you don't have a product that retains users, you shouldn't focus on growth yet.