Activation, if done correctly, strongly correlate with long term retention and are very useful for experimentation where you don't want to wait 30 days for a result.

Activation rates make sense when you look at them as what does a user have to do to get value out of the product? It might be connect a bank account for an accounting tool or complete a social post for a tool like hootsuite.

Choosing the right one is important as you will start shaping your entire funnel to get users to complete that action and if it is only correlation and not causation you may find it leading the product in the wrong direction