Growth Accounting
Measure net growth as new minus churned plus resurrected to find your real lever.
- Difficulty
- Moderate
- Time to result
- ~weeks to results
- Steps
- 4
- Confidence
- 95%
A daily net-growth equation that decomposes user growth into three flows: newly registered users, users who went stale, and users who resurrected. By separating these, you discover whether acquisition, retention, or resurrection is actually your biggest lever — Facebook's growth team found churn and resurrection lines dwarfed new users, which redirected their entire focus from acquisition to retention.
Origin
Attributed by Gleit to Danny Ferrante, who came up with the growth accounting framework on Facebook's early growth team.
Core principles
- 01Growth is not one number — it decomposes into acquisition, churn, and resurrection
- 02Define 'stale' with a concrete window (Facebook used no login for 30 days)
- 03The biggest visible flow tells you where to invest, not intuition
- 04Retention and resurrection often dwarf new-user acquisition once a product has traction
How to run it
- 1
Count new registrations
Track the number of new users who registered in the period.
- 2
Subtract stale users
Subtract users who went stale — define staleness concretely, e.g. no login within a 30-day period.
Pro tip Pick an explicit staleness window so the metric is unambiguous.
- 3
Add resurrected users
Add users who came back after going stale (returned after the 30-day window).
- 4
Compare the three lines
Compare the magnitude of the new, stale, and resurrected lines. Whichever dominates is your biggest lever to move net growth.
Pro tip If churn and resurrection lines are larger than new-user acquisition, shift your team from acquisition to engagement and retention.
Watch out Don't assume acquisition is the answer — the data may point elsewhere.
In the wild
The early growth team started focused on acquisition, then applied growth accounting: new users registered minus users who went stale after 30 days plus users who resurrected. They found the churn and resurrection lines were much larger than the new-user line.
→ A lot of the team's focus shifted to engagement and retention, which they identified as the biggest lever to drive net growth.
Common mistakes
Optimizing acquisition by default
Teams instinctively pour effort into new-user acquisition, but growth accounting often reveals retention and resurrection are the larger flows and the better place to invest.
Is it for you?
Best for
Growth PMs and founders with product-market fit trying to identify whether acquisition, retention, or resurrection is their biggest growth lever
Not ideal for
Pre-product-market-fit products with too few users to produce meaningful cohort flows
From the transcript
“We had a notion though of growth accounting which looks at how many what's our net growth every day and that would look at the…”
“so after a 30-day period that's how we Define it they no longer logged in and then plus the number of users that resurrected which…”
“what we found was the turn and Resurrection lines were actually much larger than the new user line which implied to us that retention and…”
“that was Danny fante who who really came up with the growth accounting framework”
From the episode
Meta’s Head of Product (and 29th employee) on working with Mark Zuckerberg, early growth tactics, why PMs are like conductors, and more
Naomi Gleit