Love this Sam - an important reminder of figuring out the right dynamic at play before working it up into a model! For businesses that have subscription / recurring revenue characteristics, where much of the “investment” takes the form of acquiring a stock of long-term customers, I wonder if a valuation structured around customer acquisition cost and customer lifetime value might prove more intuitive for some, both in constructing a model and in applying the insights gained?
Hello Richard! 👋 nice to hear from you and glad you liked it. Now, businesses which pay to acquire customers but then get a recurring revenue stream …. that starts to sound a bit like utilities, doesn’t it? At least the retail arm. And I think the insight for those guys is that you can invest in your existing customers too (whereas usually the mindset is … pay for acquisition, but minimise the service cost after). So yeah, I like your suggestion, but would want it to allow for some investment in looking after the punters you’ve already got! 👍✨
Interesting post Sam. Nicely written also.
Thank you!
Fascinating stuff Sammie. Agree with Fred - really well written. Keep it coming!
Really nice post! I just got a bit lost in the, arguably, much better Latin version...
Very well written, Sam! thank you
Thank you!!
Love this Sam - an important reminder of figuring out the right dynamic at play before working it up into a model! For businesses that have subscription / recurring revenue characteristics, where much of the “investment” takes the form of acquiring a stock of long-term customers, I wonder if a valuation structured around customer acquisition cost and customer lifetime value might prove more intuitive for some, both in constructing a model and in applying the insights gained?
Hello Richard! 👋 nice to hear from you and glad you liked it. Now, businesses which pay to acquire customers but then get a recurring revenue stream …. that starts to sound a bit like utilities, doesn’t it? At least the retail arm. And I think the insight for those guys is that you can invest in your existing customers too (whereas usually the mindset is … pay for acquisition, but minimise the service cost after). So yeah, I like your suggestion, but would want it to allow for some investment in looking after the punters you’ve already got! 👍✨