You don't understand retention, yet.
Missed me? I'm back. Like a disease. Like churn. Just like that feature no one uses but still makes it to the roadmap every quarter.
Over the last three weeks since my first post I've talked to at least a hundred of you, hosted a live office hour, and went full Gandalf on your retention dashboards that live in Excel. To the 98 of you who endured my rants in real time last week – thank you. To the rest of you, you're welcome.
Let's cut the fluff. Here's the verdict:
YOU STILL DON'T GET RETENTION **proceeds to cry**
You're burning money, your product and engineering teams are pissing in the wind and most important: you are flying blindfolded. But worry do not. Lucky for you, I'm here.
Retention has two ruthless halves: Net Dollar Retention (NDR)—the only financial truth—and Product Usage Retention—the predictor of that truth.
Net dollar retention:
Function of customer value minus value erosion.
NDR = Starting MRR + Expansion − Contraction − Churn Starting MRRWhat drives NDR?
- Expansion = upsell + cross sell
What are the key predictors of expansion? Product usage, account maturity and customer success.
- Contraction = downsell
What are the key predictors of contraction? Product usage, budget cuts, organizational changes, overbuying during onboarding, economic-cycles.
- Churn
What are the key predictors of churn? Onboarding completion (product usage), CSAT/NPS < 6, support ticket resolution, competitive landscape, Low stake holder engagement.
No usage = no expansion. No expansion = contraction. Contraction = churn. Churn= you die. Understand the flow?
Data don’t lie:
- Median public SaaS NDR = 108% in Q1 2025 (1).
- Private SaaS sits around 104% (2).
- Public top-tier NDR = 114%, with top 5 scoring ~170% (3)
- < 100% means you’re bleeding cash. NDR < 60%? See a therapist.
Product Usage Retention
Empathy → Setup → Aha Moment → Habit → Engagement → Retention → Loyalty.
I'll give you some examples of what I saw this past weeks:
Empathy isn't surveys: Sending all your customers a google form with: do you like my product? Sit down, grab your phone, call your customers, and expect them to destroy your product and your self esteem. You are crying on the floor, do you feel empathy yet? Do you understand the problem in their own words? If so, act on it. If not, keep talking to customers.
Set up→Aha moment isn't ling forms: asking your customers to do a 90 step onboarding process where you ask every single question the intern proposed in the roadmap meeting, because you wanted to enrich your ICP profile or whatever. Mixpanel and Amplitude show most B2B SaaS lose 40–60% of users before finishing onboarding. Plot product usage retention curves, see where the slope flattens, that's your aha moment, dissect your users per cohorts or segments, find the fastest cohort/segment to reach the aha moment, copy paste that flow to the entire user base. See what happens.
Habit isn't just DAUs: opening up whatever fancy tool you use and see DAU/WAU/MAU. Most founders never ask: What’s the natural frequency of the problem I solve?
Daily? Weekly? Monthly? Yearly? Never?
If you solve a daily problem and users log in once a month — you’re dead. If you solve a monthly problem and expect daily engagement — you’re crazy loco.
Engagement isn't clicks: "Opened the app" metric or event in tour dashboard. It's repeated value over time. You did a promise on solving a problem, you designed a happy path in your product so people would follow it and deliver value. Are people doing it? Monitor the adherence: % of users doing the core action in the expected frequency. If <50% follow the path, fire your product team.
Why It Matters
- +5% retention → 25–95% profit lift (Bain).
- Acquisition costs 16× more than retention.
- Products with habit loops see 19% vs 6% Week‑4 retention—and 5× revenue retention at 6 months.
Your startup is a function of Net Dollar Retention. Net dollar Retention is a function of Product Usage.
If your NDR is: <40% call 911.
If your NDR is: 40-60% fix your product.
If your NDR is: 60-80% you're surviving not compounding.
If your NDR is: 80-100% you're almost there.
If your NDR is: >100% call me I want to invest (I mean it, DM me aldo@platan.us)
disclaimer: this does not apply to every single business model.
Calculate NDR weekly and monthly. Segment by cohort: who’s expanding, who’s churning. Isolate product signals behind expansion. Act.
This isn't coaching. This is an intervention.
Look in the mirror: your product is a haunted mansion: empty rooms, echoing promises, no souls returned. Every unused feature is a tombstone marking wasted engineering hours, lost revenue, and investor trust you flushed.
If your NDR dips below 100%, you’re bleeding out in public view. If it’s under 60%, your burn is a funeral pyre—and startups don’t recover from that.
You think you’re building a business, but without usage, you’re building a ghost. A digital specter. A failure-in-waiting.
If your product team is pushing features nobody uses: They’re building ego, not impact. You’re burning cash, not building equity. Your metrics dashboard is a lie.
Last chance. Today calculate D1–D7 usage, time-to-aha, and NDR right now. If your numbers embarrass you, good—that means they can still wake you. Then DM me the receipts. I’ll personally help you carve back the live customers from the grave you’re digging.
But if you keep ignoring it, don’t DM me—you’ll be off raising your next round with zero retention, and zero credibility. And I don't want to be part of it.
Ask: I’m doing deep research on what “good retention” actually means across verticals and stages. If you’re down to share your numbers anonymously, publicly or semi-privately (anon cohorts welcome), DM me. I’ll help tear it down and build it better.
I’ll see you next week. Assuming your users stick around.
-Aldo. wizard. virus. AI
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