Why new SaaS users don't become paying customers (& how to fix it)

90% of the founders I talk to have a retention problem. They try to fix it by shipping more features, spending more on ads, hiring another SDR, tweaking the dashboard nobody uses. But most of them don't look at the one part of the product every single user goes through. In this video, I'm going to show you exactly why your new users aren't converting, how to figure out where in your product they are giving up, and how to fix it so the people you're already paying to acquire actually stick around. Quick context, I run Duran. We're a product design studio that works with growth-stage SaaS teams, usually pre-seed to Series A, helping them to fix the UX that's killing adoption and wasting engineering time. I've spent the last 15 years working on about 120 products, and I've spent a lot of time interviewing founders about what's actually slowing them down. The pattern is almost always the same. Their product works, users sign up, Some stick, most don't. Nobody really knows why. So they do what feels productive. They build, they market, they sell harder. And the bucket keeps leaking. Here's something founders don't always want to hear. No amount of sales or marketing can save a bad product. That sounds harsh, it's not meant to be. Marketing brings traffic, eyeballs, exposure. That's what it's supposed to do. But if the product doesn't serve the users when they get there, Churn is almost guaranteed. And I want to be specific about a word people use loosely: customer. A customer is somebody who pays. To move from stranger to user to actual paying customer, the product has to serve their needs in some way. The space between sign-up and paying customer, that's where almost every growth-stage SaaS company quietly loses money. That space has a name. It's called Activation. Activation is the moment a new user experiences the core value of your product. The aha. The moment where they think, okay, I get it, this is for me. If activation works, retention has a real shot. The user comes back, they tell a colleague, they eventually swipe a card. If activation doesn't work, you can run the best paid campaign of your life and you're still going to leak users. When retention is low, founders reach for the tools that feel productive. Cheaper feature, run a re-engagement campaign, rework the pricing page. Sometimes those help. Most of the time they don't really move the number because the user never got to the moment where the product meant something to them in the first place. There are 3 repeating reasons new users don't convert. 1, they don't understand what the product does for them. They click around, look at a few screens, and the connection between what your marketing said and what they are seeing in the app just isn't there. 2, they understand it but they don't experience the value. Reading Saying on a landing page that a tool saves you hours per week or helps you organize your work is different from actually feeling it. Until the user feels it, they are not paying. 3, the onboarding flow itself gets in the way. This is the one I see hurt activation probably the most. Most onboarding flows are basically a long list of questions someone on the team thought might be useful, asked before the user has gotten anything back. You know them: company size, department, being asked to invite your colleagues before you experience what the product can do. The first thing to do, and the cheapest, is go through your product as a brand new user would. From the homepage through signup, all the way to the first time someone hits the core value of your product. Not from memory, actually clicking through it. Open an incognito window and sign up with a fresh email. As you go, write down every step that feels like it's slowing the user down or asking for something they don't need to give yet. Things like way too many steps in the signup flow, an empty dashboard with no clear next step, or a feature showcase instead of helping the user actually do something with the product. This audit tells you what might be wrong. The next step tells you where it actually is wrong. Pull up your product analytics, Mixpanel, PostHog, Amplitude, whatever you use, and find the exact steps in the flow where people are dropping off. Then layer in session recordings. Tools like Hotjar or Microsoft Clarity will show you the actual cursor moving, what your users see, where they rage-click, or where they actually leave. The pattern you're looking for is a step where the drop-off rate is much higher than the steps before and after it. That's a leak. Then look at your support tickets and your negative reviews. Users tell you where they got stuck. You just have to read carefully. If any of this sounds like what you're seeing in your product and you'd like a second pair of eyes on the flow, the first link in the description is the way to reach us. We work with growth-stage SaaS teams on exactly these kinds of problems. Quick call, no pressure either way. Okay, back to it. Analytics tells you they left. They don't tell you what they were thinking when they left. For that, you need to talk to 2 groups of people: users who signed up and never came back, and users who stuck around. For the ones who left, ask what they were trying to do and where it stopped making sense. For the ones who stayed, Ask what made the product click for them. To make it work, reach out close to when they take the action— sign up, convert to paid, churn— while it's still fresh in their head. Getting people who like your product on a call is easy. For the ones who left, you usually need an incentive. Amazon gift cards have worked well for us. The last piece of diagnosis is figuring out what your best users actually did in their first session that your churn users didn't. Pull up the cohort of your users who converted to paid or stayed long-term. Look at the specific actions they took early, which features they clicked, which screens they visited, what order they hit them in. Then do the same for the users who churned. Look for the exact step where the 2 groups started doing different things. That moment where the paths diverge is your activation pattern. That's the behavior you need to design toward. And the part of the flow right before it? is what you redesign first. Keep one thing in mind: your job is to guide users to the value as fast as you can. First thing to look at: what you're asking for in signup and onboarding, and whether you actually need it that early. Most signup forms ask for way more than they need to. Every extra field is another reason for the user to leave. The question to ask on every field: can I collect this later, after the user actually felt the value? Most of the time, the answer is yes. First name and last name? Probably not at signup. Company size? Definitely later. The what's your role dropdown? Almost always later. And kill any personalization quiz that doesn't actually personalize anything. Users notice the white lie easily. There's nuance here, obviously. Sometimes friction upfront is the point. You're filtering out the wrong users on purpose. Sometimes a field is genuinely required to set up the account. The rule still holds. Be deliberate. Know why you're asking. Once you know what to cut, the next move is mapping the shortest possible path from sign up to the moment the user feels the product working for them. Every product has its own version of that moment. For a video editor, it might be the user finishing a quick first edit and exporting it. For an AI note-taker, it's the first time a meeting gets transcribed and summarized. Your job? Strip everything between sign up and that moment that isn't earning its place. Once you've cleared the path, you still need to guide users along it. 3 tools founders usually reach for: product tours, onboarding checklists, and in-app prompts and empty states. The goal of any of these is the same: point the user to the next action that moves them towards value, not every feature on the screen. A checklist with 12 items isn't a checklist, it's a to-do list the user didn't ask for. A product tour that highlights every button in the navigation teaches the user nothing. Pick the 3 or 4 actions that actually lead to your activation pattern and guide them through those. Often the strongest first experience is letting users create something real while they learn. Doing beats watching. One thing founders consistently miss: activation doesn't stop the moment the user creates an account. It continues in the inbox. The second the user signs up, you have a precious asset, their email. So use it. A good nurture sequence does 4 things: explains the value the product gives them, guides them through their first real steps, asks if they have questions and offers the option to schedule a short chat, shows them success stories from people like them. Most teams send one generic email and call it done. That's a missed window. The first 7 days after signup are when the user decides whether you matter to them or not. Help them decide. Last thing on the fix side, this is not something you redesign once and call it done. Your product changes, your users change. The flow that worked 6 months ago might not work now. So treat onboarding the same way you treat any part of the product— something you keep testing, measuring, and improving. To close the loop in business terms, a product that's easy to use, where users hit value fast, produces a different set of numbers across your dashboard. Higher retention, lower churn, less time spent on support, happier users who actually refer people, lower acquisition costs because you stop paying to replace the ones you lost, and eventually more revenue. The leaky bucket gets sealed from the inside. If you're a founder, CTO, or head of product shipping fast but watching users drop off, this is almost certainly the highest leverage thing you can work on this quarter. More than another feature, more than another acquisition channel. Take one product we work with. After we reworked their onboarding, signup conversion went up Roughly 20%. Same product, just a different first 10 minutes. If your reality looks like what I've been describing— users signing up but never coming back— the first link in the description is the way to reach us. We look at your specific flow, find where your users are giving up, and tell you what to fix first. Drop a comment with where your users are dropping off. I read everyone and I'll point you toward what to check first. And if you want to keep going on this, the next video is on churn and where most SaaS teams misdiagnose where they're actually losing users. That's the one I watch next. Thanks for being here.