Growth Accounting and Retention for Product Market Fit

Arjun Reddy Lingala

doi:10.36948/ijfmr.2023.v05i02.21655

Growth Accounting and Retention for Product Market Fit

Author(s)	Arjun Reddy Lingala
Country	United States
Abstract	In today’s rapidly evolving business landscape, achieving product-market fit (PMF) is a critical milestone that often separates successful ventures from those that falter [1]. This paper delves into the intricacies of growth accounting and retention strategies, two fundamental pillars that underpin sustainable growth and long-term success to achieve PMF. In the ever-evolving business environment, PMF is characterized by the aligning of a product’s value proposition with customer needs, driving demand and sustainable growth in the increasingly dynamic business environment [2]. This paper undertakes a deep exploration of growth accounting, a framework to be used to break down and understand the dynamics of growth, along with a retention analysis that ensures the customer’s loyalty and value for a long period. Growth accounting is the basis of quantitative measures for business performance that cover things like DAU, WAU, MAU, and so on. The paper also discusses retention as the primary growth driver, thoroughly examining the methodologies for measuring retention, for example, cohort analysis, and focusing on the actionable strategies to improve the product’s stickiness and customer satisfaction. By integrating these principles, businesses can optimize their resources, refine their strategies, and achieve a balance between scaling and maintaining customer engagement. This research outlines a clear path for startups and established organizations to measure growth effectively by aligning customer-centric approaches with robust metrics. Growth accounting and retention analysis are critical for understanding the trajectory of startups and established businesses aiming for product-market fit (PMF). This paper provides a structured approach to these topics, integrating frameworks, and actionable insights. This study highlights how businesses can achieve sustainable growth and maintain competitive positioning by focusing on customer acquisition and retention. In this paper, we also discuss how to implement growth accounting and retention using modern distributed systems.
Keywords	Growth Accounting, Daily Active Users, Weekly Active Users, Monthly Active Users, Retention, Churn Analysis, Retained users, New users, Churned users, Resurrected users
Field	Engineering
Published In	Volume 5, Issue 2, March-April 2023
Published On	2023-03-07
DOI	https://doi.org/10.36948/ijfmr.2023.v05i02.21655
Short DOI	https://doi.org/g82hrw

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Growth Accounting and Retention for Product Market Fit

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