Social, productivity, and finance apps optimize for different customer data and value delivery when onboarding new users. Social apps like Instagram prioritize learning about a user’s network, asking to import contacts. People’s networks are their most valuable data, and also the most value a social platform can offer. Users drop off when the platform asks for too much data before a user has evaluated if they can extract value from the platform. Dropping off can be costly: for Instagram, each user generates about $50 in revenue. In 2023, Instagram was downloaded 696 million times; if 25% drop off, Instagram could lose nearly $9 billion, or about 18% of its 2023 revenue. Early drop off also reduces the quality of the overall network a social app offers.
Productivity apps like Notion prioritize customization, asking about a user’s role, connected apps, and preferred workflows to quickly help them feel productive. If a user feels too much friction in being productive, they would drop off, since the whole point of a productivity app is to be useful. Productivity apps can also afford to have a longer onboarding period because there is less at stake if a user drops off; it doesn’t affect the overall product’s value. They also gain most of their revenue through enterprise contracts (90% of Notion’s revenue), so individual users dropping off isn’t costly.
(Notion asking about external app connections)
Lastly, finance apps face the highest onboarding friction due to sensitive data requirements (lengthy and strict verification process, money transfers taking days, etc.), so finance apps like Venmo let users immediately use the app with minimal setup, and users can add their banking information later. Venmo delivers early value with minimal setup, then unlocks full functionality after users link their bank accounts. Because unverified users can’t generate revenue, finance apps face the highest drop-off rates and business costs.
