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A Summary of

The most important consumer subscription metrics to track

by
Lenny Rachitsky
Lenny's Newsletter
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There are 3 types of consumer subscription businesses:

  1. Content - e.g. Spotify, Netflix
  2. Software - e.g. Dropbox, Turbotax
  3. Physical goods - e.g. Blue Apron, Stitch Fix

To succeed, a subscription business needs to nail 6 things:

  1. Acquire new users sustainably
  2. Get enough new users to quickly experience your value
  3. Users continue to find value
  4. Enough users decide to pay
  5. Enough users continue to pay
  6. Deliver the product/service profitably

List of metrics to watch:

  • Activation rate
  • Engagement intensity
  • Free → paid conversion
  • Cohort retention
  • Contribution margin
  • Payback period
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