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Your business has a high viral co-efficient (or perhaps even a network effect) that lets you amass users cheaply without worrying too much about the monetization per user or spending money on paid acquisition. In addition, churn tends to rise as a company grows.
One question that keeps coming up when speaking with early stage entrepreneurs when it comes to funding, is what metrics the company needs to hit to raise seed/series A/B etc: What’s a good conversion rate? Is my churnrate below the category average? What should our MRR growth be? Consumer apps and services.
Channel-level expertise: An understanding of how the channels work (e.g., Where Airbnb recognized the value in another platform, Dropbox doubled down on the strength of its product as a distribution channel. Neither would have achieved virality had customers not received something tangible for their efforts.
A tool like Quuu identifies relevant, shareable content to keep your social media channels active. . Some notable metrics are revenue growth rates, free cashflow, leverage ratios, historical financing amounts, returns on marketing spend, customer acquisition costs, lifetime value of customers, customer churnrates, and team social scores.
So, the channel selection (vs. If your goal is any form of virality , social login is a must, as it increases your Monthly Unique Users (MUU) to Monthly Active Users (MAU), meaning a returning visitor is already in a position to take sharable actions. Churnrate is proportional to the distance between sign-up and value.
But even if a VC is nasty a rant email back isn’t the right way to channel your frustration. Your churnrates are too high. They qualify every initiative with, “well this didn’t prove viral adoption last time so I don’t expect a silver bullet this time.” It happens to nearly every startup.
For this type of model, I would like to understand how the number of inbounds is scaling with the activities and how much virality there is in the model as the word spreads out in the community SMB door to door sales (e.g., This model relies on grass root marketing of the targeted community, combined with smart online tactics (e.g.,
Conventional wisdom suggests that the most important metrics for a startup - such as unit economics, cost of acquisition, lifetime value, churnrates - typically get better with time. Churnrates are another metric that can get harder with scale. in 2009 to $11.80 in 2012.
This is misleading because in a recurring revenue model, Customer A is much more valuable to the business (assuming typical churnrates) as they will likely generate $360,000 of revenue for the business with renewals over that same three year period. Philippe Botteri. Bessemer SaaS Law #5.
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