🧠 You don't have users. You have lurkers.
Your churn problem isn't a product problem. Those "early adopters" aren't adopting anything. Here's why your engagement metrics are lying to you — and what to measure instead.
Hey friends 👋
Sarah had a retention problem.
Her B2B productivity app was bleeding users. People would sign up, use it for a week, then vanish. The cohort charts looked like a ski slope.
So she did what any smart founder would do: she fixed the product.
Badges for completing tasks. Daily streaks for consistent usage. Leaderboards to create competition. Push notifications to bring people back. Dashboards for managers. A new onboarding sequence with tooltips and tutorials.
Three months of engineering time. A complete gamification overhaul.
The result? The ski slope steepened.
More people were bouncing during onboarding. The ones who stayed were gaming the system for points instead of using the core features. And still… nobody was converting to paid.
Sarah's problem wasn't retention. It was recognition.
She didn't have users. She had lurkers.
Users were browsing around, curious about productivity software, but had no intention of actually changing how they work. Tourists were attracted by her viral LinkedIn posts about "productivity hacks," but they weren’t customers desperate to solve a workflow problem.
She was optimizing for the wrong people, and burning months trying to make freeloaders into customers — instead of finding the real customers.
This pattern kills more startups than bad product-market fit. At least then, you know you're failing. But with lurkers masquerading as users?
You think you're winning right up until you run out of runway.
Let's dive deep 👇
The lurker economy is killing your startup
Not all early users are created equal. But most founders treat them like they are.
They celebrate total signups instead of paying customers. They optimize for engagement instead of revenue. They build features for people who browse instead of people who buy.
There four types of early users:
Tourists: Drawn by curiosity, not problems. They'll try anything that's free and interesting. Browse for novelty, abandon when boredom hits. Hello, ProductHunt.
Lurkers: Passive observers who engage but never commit. They'll read your content, sign up for free trials, maybe even use your product occasionally. But they won't change their behavior or pay any money.
Converters: They actually use your product to solve their problem. They integrate it into their workflow, rely on it regularly, and see measurable value.
Buyers: They will pay money to keep solving their problem. They have urgency, budget authority, and willingness to invest resources.
Here's the trap: tourists and lurkers show up in early metrics the same as converters and buyers.
Signups, session duration, feature usage — all identical. But only one group will ever pay you. Only one group represents actual demand.
Founders often confuse interest with intent. They assume people who use the free version will naturally upgrade to paid. They think early engagement predicts conversion.
The reality is that interest is cheap. Intent costs money.
But there's a deeper problem: insecurity.
You're afraid to try to charge because you're afraid to learn you built something nobody wants to pay for. So you give it away free and tell yourself you're "testing" and gathering "feedback."
What you're actually doing is delaying the moment of truth.
Instead of learning on day one that you have the wrong customers, you learn on day 300 — after burning months of runway optimizing for the deadbeats.
The cost isn't just time and money. It's false confidence that kills your ability to pivot when you still can.
There are four common fake user traps.
We see these. All. The. Time.
These scenarios look like traction but lead nowhere. Founders celebrate the metrics while missing the warning signs.
The innovation theater trap
Your "enterprise customer" is their innovation team.
Big companies have innovation groups with budgets for experimenting. They'll pilot anything that sounds cutting-edge because their job is to explore new technologies, and not to solve urgent business problems.
The pilot goes great. The innovation team loves your product. You add their logo to your deck and tell investors about your "enterprise validation."
But when pilot time ends, the innovation team has no authority to purchase. The actual business units — the ones with budget and urgency — have barely heard of you.
Now you're starting the sales process from scratch, with people who don't feel the pain you solve with sufficient severity and urgency to buy it on their own.
The innovation team was never your customer. They were just doing their job: trying new things on the company's dime.
The grant money mirage
Your "customer" is spending someone else's money to explore an idea — or even solve someone else's problem.
Companies get grants to try new technologies, improve efficiency, or hit sustainability targets. They'll pilot your product because the grant covers it, not because they desperately need what you're building.
When the grant expires, so does their interest. Suddenly they need to justify spending their own budget on your solution — and discover they can't.
You weren't solving a business problem. You were meeting a grant requirement.
The viral mismatch
Your TikTok about "productivity hacks" went viral. Thousands of people signed up for your app.
But they came for entertainment, not transformation. They wanted to watch productivity content, not actually be more productive. Your viral message attracted tourists, not people struggling with genuine workflow problems.
They engage with your app like they engage with TikTok — passively, sporadically, and for entertainment. Then they churn when they realize your app requires work to deliver value.
It’s message-market mismatch at scale. You optimized for viral content instead of customer problems.
The "free first" fantasy
You're building a B2C app and decide to grow a user base before charging anything.
"Let's prove people want this first, then figure out monetization."
But free users don't behave like paying users. They have no skin in the game, no commitment, no urgency. They'll try your app the same way they try every free app — casually, temporarily, and without changing their habits.
So you build features and optimize onboarding for people who will never pay. And when you finally try to monetize, you discover your "product-market fit" was actually "product-freeloader fit."
Free users aren't a preview of paying customers. They're a different species entirely.
And so all these users churn, and you’re left to figure out why.
There are three reasons users churn.
When users disappear, founders immediately assume it's a product problem. They add features, fix bugs, improve onboarding — anything to stop the bleeding.
But churn has three possible causes — the three Ps — and Product is just one of them.
And it's usually not the right one.
People: wrong customers
Your churning users lack sufficient urgency to put in the work your product requires.
They seem interested during demos and trials. They engage with your content, sign up for your app, maybe even use it for a few days. But when your product asks them to change their behavior — to input data, integrate systems, adopt new workflows — they vanish.
This isn't lazy users. This is wrong users.
Real customers will climb mountains to solve their urgent problems. They'll tolerate clunky interfaces, manual data entry, even bugs — if your product solves something critical.
That’s why MVPs can be minimal.
Tourists won't. They want solutions to be effortless and entertaining. As soon as your product requires work, they're gone.
Classic symptoms: High initial engagement that drops off during onboarding. Users who abandon when asked to integrate, input data, or change existing processes.
Promise: expectation mismatch
What you promised doesn't match what you delivered.
Your viral marketing attracted people expecting X, but your product delivers Y. The gap between expectation and reality creates immediate churn, no matter how good your product is.
This happens when what you sold them doesn't match what they bought. Your TikTok promised "effortless productivity," but your app requires significant setup and behavior change.
Or when you're solving the right problem for the wrong reasons — your customers signed up to save time, but your messaging emphasized saving money.
They never bought into your real value proposition.
Classic symptoms: Users seem confused about what your product does. High engagement with marketing content but low engagement with core features. Good trial-to-signup conversion but terrible trial-to-paid conversion.
Product: actual functionality issues
Sometimes it really is the product: broken features, terrible UX, and missing capabilities that prevent users from getting value they signed up for.
Here's how to tell the difference: product problems affect everyone equally. If paying customers are also churning at high rates, you might have a product issue. If only free users are churning while paid users stick around, you have a people problem.
Classic symptoms: Everyone churns at similar rates regardless of how they found you or how much they paid. Specific complaints about functionality, bugs, or missing features. Users who get initial value but leave due to product limitations.
The diagnostic sequence
Always check in this order: People → Promise → Product.
Most “product” problems are actually people problems in disguise.
Fix product issues only after confirming you have the right customers with the right expectations. Otherwise you'll spend months optimizing a product for people who will never pay you.
Measure intent, not interest
Sarah's gamification experiment failed because she was solving the wrong problem for the wrong people.
Her churning users weren't disengaged — they were disqualified. They didn't need better onboarding or more notifications. They needed to be replaced with actual customers.
This isn't the exception — it's the rule.
Most early user problems aren't retention problems. They're acquisition problems.
You're attracting browsers instead of buyers. Tourists instead of customers. They want to try your product, but it doesn't solve a big enough problem to continue using it.
The diagnostic questions:
Are your churning users also your non-paying users? People problem.
Do users seem confused about what your product does? Promise problem.
Are paying customers churning at the same rate as free users? Product problem.
The fixes:
People problem: Stop optimizing for engagement. Start charging immediately to separate curiosity from urgency. If they won't pay, you're not solving their problem.
Promise problem: Audit your marketing messages against your product experience. Make sure what you're selling matches what you're delivering.
Product problem: Fix the functionality issues. But only after confirming you're building for the right people with the right expectations.
The fastest way to identify your real customers? Make them pay.
Money is the ultimate signal of intent. Everything else — signups, sessions, engagement, reviews — is just interest. And interest doesn't pay your bills.
Your retention problem might actually be that you're retaining the wrong people.
Stop trying to convert lurkers into customers. Start finding customers and ignore the lurkers.
Until next week,
—jdm
PS: Struggling with churn and can't tell if it's a people, promise, or product problem? Let's diagnose what's really driving users away. Book a diagnostic call →