Cohort Analysis
Definition
Cohort analysis groups customers by their start period and tracks each group’s behavior (retention, spending) over time, revealing whether the product actually keeps users.
How it comes up in fundraising
Investors read retention cohorts before almost anything else: flattening curves signal product-market fit, decaying-to-zero curves signal churn wearing a growth costume.
Frequently asked questions
Why are cohorts better than average retention?
Averages blend old and new customers, masking decay; cohorts show whether each successive group retains better or worse, which is the real trend.
What does a good cohort curve look like?
It drops initially and then flattens at a stable floor, meaning a durable core keeps using the product month after month.
Related terms
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