Introduction to Cohort Analysis for Startups

Sometimes, when you’re buried in data, statistics, graphs and reports, analytics work can feel a tad dry. Personally, I tolerate creating reports (generally by automating them) but find analysis (identifying why the data is the way it is) rather compelling. In this first of several posts on cohort analysis I’m going to explore why dividing your visitors into cohorts is the fastest path to the insight you need to answer the tough “why” questions about your data.

Is your product getting better?

How do you know? It’s easy to see when the data for your game, blog or service has changed but how do you know if it’s due to your latest “improvements”? Take a look at the graph below from Google Analytics:

Assume that this plot shows the number of visits in which people achieved some significant goal with your product – say, downloading a white paper from your blog. Are you getting more downloads? Clearly. Let’s ask another question. You made several key changes to your site in August aimed at increasing the download rate. Did they help? Are new visitors more likely to start this download now than they were before?

Contrary to appearances, the above graph tells you almost nothing about the effect of your changes. If the traffic to your startup also increased during this period then how would you know how much of the increase above is due to growth and how much is due to your changes, if any? How can we tell if we’re making progress? There are many ways to improve this analysis (segmentation, funnels and split tests come to mind) but the best place to start is to separate changes in user behavior from product growth using cohort analysis.

What’s a cohort?

Cohort studies, sometimes referred to as panel studies or longitudinal studies, focus on the activities of a cohort group. A cohort is basically a group of people who share something in common. They might have the same height, birth year, or even the same vaccination history. For an online startup company, cohort analysis usually involves clustering users by the day, week or month in which they first start using your product.

Cohort definitions aside, their real value comes in allowing us to compare the retention and engagement of user groups against each other to ensure that changes made during each period have a positive impact on our product.

For example, assume we use Time on Site as our core engagement metric. Looking back over our data for the past couple months, we might find that the Week 3 cohort has consistently remained more engaged (stayed significantly longer on each visit) than other weekly cohorts. In doing so, we aren’t necessarily saying that we saw more users who were engaged during week 3. Instead, we’re saying that those users who joined in week 3 have, over the last couple months, proven to spend more time with our startup product on each visit than other weekly cohorts.

Likewise, looking at cohort retention, we might see that the Week 3 cohort has remained stubbornly loyal to our humble product offering.

Growth is great but the goal here is to isolate the data in such a way that we focus on factors that improve the product. A vanity metric, like number of visits, is interesting but it tells you nothing about why your data looks this way or how you might improve it in the future. Our aim is to focus on startup analytics with actionable metrics that offer real insights and help us make decisions

At this point we aren’t trying to answer why we’ve seen the change. There are many possibilities apart from product improvements. Our first priority is to recognize that a change in our startup metrics has occurred and isolate it. Armed with this information we can then attempt to correlate positive and negative changes with product modifications. Did you make a product alteration that only the Week 3 cohort would be exposed to? Did you change your advertising that week? Does Week 3 correspond with any major holidays or events?

The great thing about customer cohort analysis in web analytics is that each new group provides the opportunity to start with a fresh set of users. This allows us to passively identify differences in our cohort metrics after the fact or actively segment out controlled cohort test groups for more directed analysis. We can now, on a regular basis, focus on how well we engage with our audience independent of how much we’re growing.



52 thoughts on “Introduction to Cohort Analysis for Startups

  1. Pingback: How to do Cohort Analysis in Google Analytics | Jonathon Balogh

  2. Pingback: Quora

  3. Pingback: Citação – Michael Karnjanaprakorn « Startup Biz Model

  4. Pingback: How to do Cohort Analysis in Google Analytics | Jonathon Balogh

  5. Pingback: Founders Dictionary | Cohort Analysis

  6. Pingback: Cohort analysis in a nutshell | A blog about behavioral economics, crowdfunding, crowdsourcing, gamification and more

  7. Pingback: Primer to Building Products in a Lean Startup » taigeair taigeair

  8. Pingback: Web App Analytics Checklist | Dirty AnalyticsDirty Analytics

  9. Great article! Many thanks for sharing. Just noting a small typo in the 3rd paragraph. It should be: “On the next *week, visitors begin to be assigned to the next cohort group (Week 44), shown in orange above.”

  10. Simple and great explanation! Thanks

    How was this visualization generated , the one tagged “The week 3 cohort appears to be more likely to stick with your product. Why?” ?

  11. It’s awesome to pay a quick visit this web site and reading the views of all mates
    regarding this post, while I am also keen of getting experience.

  12. Introduction to Cohort Analysis for Startups | Jonathon Balogh
    Hi there! I just wanted to ask if you ever have any problems with hackers?
    My last blog (wordpress) was hacked and I ended up losing months of
    hard work due to no backup. Do you have any methods to prevent hackers?

  13. Introduction to Cohort Analysis for Startups | Jonathon Balogh
    I think the admin of this site is really working hard for his website, because here every data is
    quality based stuff.

  14. I do not even know how I ended up here, but I thought this post was good.
    I don’t know who you are but definitely you’re going to a famous
    blogger if you aren’t already 😉 Cheers!

  15. Professionally established, designed, and marketed social media accounts such as Twitter and
    Facebook allow skin care companies to build out their skin care communities.
    Before diving into the world of web development, get in terms with jargons of the industry and there is much more to consider than determining
    price. When you go to a website, you instantly get a feel for the business.

  16. What i don’t understood is in fact how you’re
    no longer actually much more neatly-favored than you
    may be right now. You are very intelligent. You recognize thus considerably
    when it comes to this topic, produced me in my opinion consider
    it from numerous various angles. Its like men and women aren’t involved until it is one thing to
    do with Lady gaga! Your individual stuffs nice. All the time take care of it up!

  17. Hello there! This blog post could not bbe writtfen any better!
    Looking aat this arrticle reminds me of my previous roommate!
    He contfinually kept preaching about this. I aam going to send thhis article to him.
    Pretty sure he’s going to have a great read. Many thanks for

  18. The debris container is easy to empty; there are no bags.
    As I rinsed a couple of years of dust down the drain it was hard to not have a little splash up and become airborne.
    Also, due towards the reality which the suction ability of this
    Dyson DC25 all floors vacuum cleaner is fairly impressive, it has the capacity of
    selecting up any form of filth from all varieties
    of floors (that incorporates carpets, rugs, wood, and tiles) with ease.

  19. you are actually a just right webmaster. The site loading speed is incredible.
    It sort of feels that you’re doing any distinctive trick.
    Moreover, The contents are masterpiece. you have performed a great process in this matter!

  20. Excellent post. I was checking continuously this blog and I’m impressed!
    Very useful information specifically the last part :
    ) I care for such information much. I was seeking this certain information for a
    long time. Thank you and best of luck.

  21. Excellent beat ! I would like to apprentice while you amend your site, how could i subscribe for a blog site?
    The account aided me a acceptable deal. I had been tiny bit acquainted
    of this your broadcast offered bright clear idea

  22. Thanks for a marvelous posting! I definitely enjoyed reading it, you are a great author.
    I will make certain to bookmark your blog and will come
    back very soon. I want to encourage you continue your great job,
    have a nice afternoon!

  23. Very nice post. I just stumbled upon your blog and wanted to
    mention that I’ve really loved browsing your blog posts. In any case I’ll be subscribing for your rss feed and I am hoping you
    write once more soon!

  24. Pingback: Player Profiling – A Short Reading List | Game Analytics Resources v. Anders Drachen

  25. Hi blogger, i found this post on 16 spot in google’s search results.
    You should decrease your bounce rate in order to rank in google.
    This is major ranking factor nowadays. There is very handy
    wp plugin which can help you. Just search in google for:

    Lilas’s Bounce Plugin

  26. So, it is necessary that you plan your shoe budget before buying
    one. All footwear at Bourne is hand-crafted especially by
    Opanka construction and the use of adhesives and machinery is minimal while creating the
    shoes, thus making the designs eco-friendly. The Fashion Industry is
    totally focused on how people look and larger people do not figure on mainstream
    fashion’s radar.

  27. Pingback: Metrics, Metrics: Measure to optimize - How to Web

  28. Also, they have ruled the market due to their anatomical constructions of shoes that
    make the shoes anti-stress with special shock absorption system.
    You should always seek advice from someone
    who has purchase the original boots before. Toe Size: The right shoe will not only fit well but will also be flexible in the toe area, with enough
    space for your feet to relax, without being pinched in very tight.

  29. Hola! Gracias poor esta información. Llevaba un rato buscando por laa red sobre este tema
    hasta que he encontrado tu página web. Está muy bien el artículo.
    Prosigue de esta forma!

  30. Metal is the element of this sector, and would
    attract positive Ch’i. If (based on their individual
    energies) most of the party is fire (as an example), we may want
    to downplay the color red. Water fountains are basically put under the water just to make the overall premises stunning or lucrative.

  31. Pingback: Understanding Cohort Analysis - Startups & Marketing Blog

  32. Pingback: User Behavioural Analytics – Yong Liu – Writing for Learning and Sharing

  33. First off I would like to say superb blog! I had a quick question which I’d like
    to ask if you do not mind. I was interested to know how you center yourself and clear your head before writing.
    I’ve had a difficult time clearing my mind in getting my
    ideas out. I truly do enjoy writing but it just
    seems like the first 10 to 15 minutes are wasted just trying to figure out how to
    begin. Any suggestions or hints? Cheers!

  34. Pingback: Start up res - My Notebook

  35. Pingback: Understanding Cohort Analysis | Amarnath Vannarath

  36. Pingback: Wildlife Studios: Why Your Studio Needs Data Scientists – Technology Blog

  37. Pingback: User Behavioural Analytics – Writing for Learning and Sharing

Leave a Reply to Emilio Cancel reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s