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What is Early Lifecycle Churn?
A lot of times, especially in Self-Serve SaaS, what you'll see is that there's a steeper amount of churn at the beginning, where people are maybe not super committed, maybe they converted because their trial elapsed, but they didn't really actually want to become customers, et cetera. And then eventually, over time you ideally want to see that churn start to plane out... ideally approach zero as much as possible.
And so, when you zoom back and you look at what I guess we could call "meta churn" or the full customer-wide churn, a lot of that is disproportionately driven by newer customers rather than older customers because your older customers are generally a little bit more locked in and a little bit more churn proof.
The Early Churn Opportunity
This is true for any subscription business, but I think it's especially true for Self-Serve. And again, even though it sounds like it's a drawback or a flaw in the business model, to me, it's more of an opportunity where you can say, there's a lot of churn that's happening up front and that is really going to affect the lifetime value of this given cohort of new customers because if we lose people in month two, it's not like they're just gonna come back in month three for any reason. Once they're gone, they're pretty much gone. And so if we can have a tight feedback loop in place that tries to bring our month two, and month three churn numbers up, we'll learn a lot faster than if we're trying to improve aggregate churn, and we'll also have a handle on the area where our churn is the worst, even if that's being obfuscated by looking at it in the macro view.
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