Growth Accounting

Breaking down user growth into its components. Reveals whether growth is healthy or hollow.

Vanity Risk

Top-line MAU growth is vanity when it masks a leaky bucket. If 60% of your "active" users each month are resurrected churners, you have a revolving door, not real growth.

MAU Growth = New Users + Resurrected Users − Churned Users

What it measures

A framework that decomposes user growth into New (first-time users), Retained (continued from last period), Resurrected (returned after absence), and Churned (stopped using). The User Quick Ratio ((New + Resurrected) / Churned) measures growth efficiency.

What to watch

High resurrection, high churn: Users cycle in and out. You're not building a stable base. Investigate why users leave and what brings them back.
Low resurrection, low churn: Stable but may lack growth. Your existing users stay, but you're not winning back lapsed users.
User Quick Ratio above 4: Excellent for SaaS. Above 1.5 is very good for consumer apps. Below 1 means you're shrinking.

In practice

A mobile game showed 15% MAU growth, but growth accounting revealed 60% of "active" users each month were resurrected players who churned again within weeks. True retained users were declining. They shifted focus from re-engagement campaigns to fixing the core gameplay loop that caused churn in the first place.