A funnel is an ordered sequence of steps and the share of people who complete each one.
Building one
Pick the steps in order. Each can be an event or a defined event.
Reading one
The drop between two steps is the finding. A large drop means either a real obstacle or two steps that are not as connected as you assumed.
Conversion windows
A funnel needs a window — how long someone has to get from first step to last. Too short and you undercount slow but genuine conversions; too long and you count coincidences. Set it from how the product is actually used.
Breakdowns
Split a funnel by a property to see whether a drop is universal or specific to one segment. It usually is not universal.