How can we explain the sudden 30% decrease in new user signups for Avalara's Returns Excise product in the past two weeks?

Introduction

A sudden 30% decrease in new user signups for Avalara's Returns Excise product over the past two weeks is a critical issue that demands immediate attention. To address this problem, I'll employ a systematic approach to identify, validate, and resolve the root cause while considering both short-term and long-term implications.

My analysis will follow a structured framework, beginning with clarifying questions to gather essential context, followed by a thorough examination of potential external factors. I'll then delve into the product's user journey, break down the metric in question, and formulate data-driven hypotheses. Through rigorous root cause analysis and validation, we'll develop a comprehensive plan to address the issue and prevent future occurrences.

Step 1

Clarifying Questions (3 minutes)

• Looking at the timing, I'm thinking there might have been a recent product update. Has there been any significant change to the Returns Excise product in the last month?

Why it matters: Recent changes could directly impact user signups. Expected answer: Yes, there was a UI overhaul two weeks ago. Impact on approach: If confirmed, we'd focus on the UI changes and user experience.

• Considering the specificity of the decrease, I'm wondering about our measurement accuracy. Has there been any change in how we track or define new user signups recently?

Why it matters: Ensures we're addressing a real issue, not a measurement anomaly. Expected answer: No changes in measurement methods. Impact on approach: If there were changes, we'd need to audit our tracking systems first.

• Given the product's nature, I'm curious about seasonal patterns. Is this 30% decrease unusual compared to the same period in previous years?

Why it matters: Helps distinguish between normal fluctuations and genuine problems. Expected answer: This decrease is abnormal for the season. Impact on approach: If seasonal, we'd focus on why this year is different.

• Considering potential external factors, have there been any significant regulatory changes in the excise tax landscape recently?

Why it matters: Regulatory shifts could impact demand for tax software. Expected answer: No major regulatory changes. Impact on approach: If there were changes, we'd need to assess our product's alignment with new regulations.