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You have recently been hired as a product manager at Mindstorm Studios. Your main product is a Chat stories app (Imagine a netflix type
You have recently been hired as a product manager at Mindstorm Studios. Your main product is a Chat stories app (Imagine a netflix type design for reading stories) that allows subscribers to unlock all stories in the app and read them at any time. The app primarily targets female professionals in their 30s and 40s that want to read interesting stories while they are commuting to their workplace. They pay $5 a month to access all content (that includes different types of story categories like Comedy, Horror, and Romance). After signing-up users can enjoy that content free of charge for 30 days (trial) after which they must pay the $5 a month fee to keep access to all content The cost of development of the app is $2,000 per month. The app has just launched yesterday and we have a starting user base of 2,000 users. To acquire users, we run a campaign in Google Ads (for the keywords "Story apps") with a cost-per-ad click of $2 and a monthly marketing budget of $1,000. All users that click on the ad, land in our sign-up form which 25% of them complete. The app's retention curve looks like this for existing and new users acquired in a given month. Retention is expressed as a percentage of the initially acquired users per cohort. Build your model in a spreadsheet to explain the situation and give recommendations App's monthly cohort retention Month MO M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12 Retention 100% 35% 25% 20% 15% 12% 11% 9% 8% 6% 5% 3% 0% Comments Month 0 retention defined as % users who log in the app at least once in the first 30 days after sign up Month 1 retention defined as % users who log in the app at least once from Day 31 to 60 after sign up Month 2 retention defined as % users who log in the app at least once from Day 61 to 90 after sign up Month 3 retention defined as % users who log in the app at least once from Day 91 to 120 after sign up Month 4 retention defined as % users who log in the app at least once from Day 121 to 150 after sign up Month 5 retention defined as % users who log in the app at least once from Day 151 to 180 after sign up Month 6 retention defined as % users who log in the app at least once from Day 181 to 210 after sign up Month 7 retention defined as % users who log in the app at least once from Day 211 to 240 after sign up Month 8 retention defined as % users who log in the app at least once from Day 241 to 270 after sign up Month 9 retention defined as % users who log in the app at least once from Day 271 to 300 after sign up Month 10 retention defined as % users who log in the app at least once from Day 301 to 330 after sign up Month 11 retention defined as % users who log in the app at least once from Day 331 to 360 after sign up Month 12 retention defined as % users who log in the app at least once from Day 361 to 390 after sign up
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