One mistake many companies make is not tracking their cohort retention curve, which shows the percentage of users returning over time. The speaker emphasizes the importance of looking at retention beyond 30 days to identify true habit-forming behavior in products. For Google Photos, a good user is someone who uses the app almost every day or most days of the week. The speaker suggests measuring cohort retention on a daily or weekly basis by counting users who have used the app in the last seven days. They caution against relying solely on monthly active users (MAU) as it could include users who don't actually use the product regularly. The speaker shares an anecdote about their experience with Bump, where they had a high number of installs but discovered many sessions were less than one second, indicating accidental openings. They warn about the misleading nature of aggregate data and stress the importance of a flat and consistent retention curve, even if it represents a small percentage of the initial user cohort.

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