Article · ~8 min read

Customer acquisition vs. retention: where should early-stage startups invest?

Eleanor Hecks · Startups Magazine Free Beginner

This one draws the line the question is really after: before product-market fit, lean into acquisition to test and find your audience; once people are sticking, shift weight toward retention. It gives you a way to decide by stage rather than a blanket rule. Use it as a starting point to place your own startup on that curve, then act on where you actually are.

  • Pre-product-market fit, acquisition earns more attention because you are still learning who the product is for.
  • Once you have signs of fit, retention becomes the lever that turns those signups into lasting value.
  • The honest answer is rarely either/or: ship the basics of both, but weight them to your current stage.

The question it answers

  1. How soon after signup should I even worry about retention versus just getting more users in the door?

Read with it

  1. This is the clearest statement of the argument you need before you touch either lever: retention is not one metric among many,... OpenView Essay Retention Is the King of Growth (Brian Balfour, 500 Startups talk) Brian Balfour
  2. YC's David Lieb walks through cohort retention: watching each week's new users and asking how many actually come back. For a... Y Combinator Startup School Video · ~20 min How To Improve Cohort Retention David Lieb
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