Jonathan Hsu - Growth accounting
With a 40% gross retention rate, mobile app A churns 60% of its active user base every month. Mobile app A’s quick ratio has been fluctuating between 1 and 1.5, which means that for every three new users the company adds, it is also losing two to three users to churn.
That churn, however, is masked by new users who sign up for the app and show activity in that month.
While app A’s churn isn’t necessarily increasing, it’s not decreasing either in spite of the new features and improvements being added to the app.
— Jonathan Hsu