User onboarding for startups: A comprehensive guide

Early users often shape the long-term success of a product, and user onboarding is your best opportunity to engage, educate, and convert them. 

But you already knew that—which is why you’re here. In this guide to user onboarding for startups, you’ll learn how to create a first impression that gets users to value and keeps them coming back. 

Why is user onboarding important for startups?

User onboarding is more than just getting a new user to log in. It’s about ensuring they realize the value of your product enough to keep coming back. 

A smooth onboarding experience reduces friction, improves user satisfaction, and significantly decreases churn. What’s more, it has an outsize impact for startups. Companies with less than 200 employees keep 40% of users after one month, but after three months, less than one third of users return on average.

Preparing for your startup’s user onboarding

Onboarding happens asynchronously now—not in training calls. As you grow, three tools will become critical to scale and personalize your product experience.  

To provide targeted onboarding experiences and give users the guidance they need (exactly when they need it), you need:

• In-app guides: Perhaps the most important part of onboarding, you need a tool to walk users through key features with contextual tips and interactive content. Types of in-app guides include interactive walkthroughs, native tooltips, resource centers, checklists, and pop-ups. 
• Product analytics: After you’ve launched your onboarding flows, product analytics will tell you where there are friction points and how users interact with your product. Analytics are essential to understand how onboarding flows are performing and what can be better.
• Feedback capture: Collecting real-time user feedback will help you continuously improve the onboarding experience. Is something confusing or frustrating? In-app feedback capture is the fastest way to find out. 

What should startups include in user onboarding? 

Successful user onboarding helps new users reach their “aha!” moment—the point where they truly start getting value from the product. 

There are a few key steps to get users from their first interaction with your product to that realization:

1. A welcome and orientation

Start with an introduction to the app and a basic tour of the main navigation. A clear, welcoming onboarding experience helps users understand the app’s purpose and how to find what they need to complete key tasks.

2. Guide users through configuration

Some products need initial setup before users can start benefiting from them. For a collaboration tool, users might need to add teammates. For a music discovery app, they may need to set their listening preferences. Onboarding should guide them through these steps so they’re ready to use the product effectively.

3. Facilitate setup and payoff tasks

The “aha!” moment comes when users accomplish a goal that drew them to the product in the first place. For example, in a task management app, this could be checking off a completed task; in a billing tool, it might be receiving a payment. 

Before they can get there, though, they often need to do some setup, like creating that first task. Good onboarding walks users through both the setup and the payoff to make sure they see the product’s value as soon as possible.

5 best practices for new user onboarding

1. Personalize each experience

To get the most bang for your buck, segment users and tailor onboarding experiences to their different needs. Whether you’re personalizing onboarding based on persona, in-app behaviors, or industry, your startup needs customized onboarding flows that meet the unique needs of each user segment.

For example, an education tech startup should guide teachers and faculty through how to upload grades and build courses, and guide students or their parents through submitting assignments. Personalization ensures that each type of user quickly finds value in your product, so they stick around and build enduring habits.

2. Analyze and iterate on performance

Product usage data helps startups to track how users engage with onboarding flows (and where they run into issues), so you can easily monitor and optimize its impact. Analyze drop-off points, guide completion rates, and feature engagement to identify areas for improvement and make data-driven adjustments.

Checking the data helps startups ensure that they’re constantly improving and retaining as many users as possible. You can A/B test different messaging, guide lengths, and personalization segmentation to find the best onboarding approaches for your users.

3. Automate onboarding to scale with growth

As your startup grows, scaling your new user onboarding is even more important—and even more challenging. This is when your in-app guides and analytics can make or break your product experience. Tap into your product experience platform’s automation capabilities to  create onboarding flows that adapt based on in-app user behavior—without manual intervention.

For instance, startups can automate in-app pop-ups to guide users through specific tasks or features based on features they haven’t interacted with in the product. This ensures that as a startup’s user base grows, onboarding remains consistent and efficient.

4. Differentiate between new users and new accounts

In B2B products, accounts often have multiple users, with new team members joining regularly. When a new user joins an existing account, their onboarding can be more streamlined since the main account setup has already been completed. In this case, the goal is to help the new team member get up to speed on current activity, rather than starting from scratch.

5. Accommodate different learning styles

Consider offering flexible onboarding paths to accommodate how users prefer to learn. Modularized content allows users to explore topics in their own order. 

For longer or more complex onboarding, tools like progress bars or completion percentages can help keep users on track. Incorporating different formats, such as video demos and illustrated walkthroughs, ensures broader accessibility. Adding elements of gamification can also motivate users to complete their onboarding journey.

How to measure and benchmark onboarding for startups

To truly understand the effectiveness of your onboarding process, startups need to track (and benchmark) these key metrics:

• Onboarding completion rates: How many users successfully complete the onboarding flow? To find this, divide the number of users who finished onboarding by the total number of users in the onboarding cohort.
• Time to value: How long does it take users to adopt a core feature after logging in? The average time to value for startups is 1.5 days.
• Feature adoption: Are users engaging with your core features after onboarding? On average, only 7% of features drive 80% of clicks for startups.
• Retention rates: Are users sticking around after the initial onboarding? For startups, average one-month user retention is 40%.
• Time on app: How long are users spending on your mobile and web apps? Average time is 22.7 minutes on web apps, and 5.9 minutes on mobile apps, for startups.
• Guide engagement: Are users interacting with your in-app guidance? Startups have an average guide engagement rate of 27.4%.

Leading with data is a core element of product-led growth (PLG). To see how your product stacks up with other startups, explore product benchmarks.

Startup onboarding spotlight: PagerDuty

UX Director Jeff Lopes was on the hunt for an in-app guidance tool to support PagerDuty’s rapid growth, ensuring their users could keep up with the evolving platform. After testing several products, they found the ideal solution in Pendo. 

By using Pendo In-app Guides, PagerDuty boosted onboarding engagement by 700% and increased webinar sign-ups from 10-20 attendees to over 120.

Guides have become an integral part of their feature launches, particularly for beta groups, allowing them to create a feedback loop with polling. Jeff also uses Pendo Analytics, which allows him to observe user behavior in their natural environment, providing more authentic insights.

Startup onboarding spotlight: ShippingEasy

ShippingEasy’s customers—small, independent online retailers—don’t have much time to learn a new software tool as they’re busy handling incoming orders from across the web. So, the team needed a way to onboard new users quickly (and effectively) in order to demonstrate the value of their platform as early in the user journey as possible.

To accomplish this, ShippingEasy uses in-app guides to walk users through the most important tasks in their app. For example, they created a series of tooltips to show new users how to set up orders, which is an essential workflow that retailers need to know how to do.

Want to see more? Here are 5 real-world examples of great in-app onboarding.

Why do startups prefer Pendo for onboarding?

Pendo’s product experience platform is all-in-one, giving you product analytics, in-app guides, session replays, and customer intelligence. 

Startups that leverage Pendo can tap into the power of in-app guides, segmented messaging, and real-time data to ensure their users are getting the most out of the product from the very beginning. For a startup focused on scaling, these tools provide an invaluable foundation for user engagement and retention.

By now, you know why onboarding is so important—and how to get started. Get started with Pendo Free, or take a tour to see just how easy you can set up customer onboarding.