Video Notes - Business Model and Metrics

Business Models and Metrics

SaaS

• When you measure the Churn / don’t see the blended number / it can make things look better than they actually are / keep the New Customers out of this equation

Subscription Business

• Measure Unit Churn instead of Revenue Churn

• Compounded Monthly Growth Rate / instead of averages / averages can make your Growth look good because of spikes

Marketplace

• In case of Airbnb since people travel once a year / they figured out creative ways to measure retention

• People don’t usually book their stay one day before travel / people start doing research six months before / so the way Airbnb measured retention is by measuring if the users were searching on the Platform

• Again / for Paid CAC / do not measure the blended number / measure the CAC through Paid Users only / only then you’ll know if your Paid Marketing is sustainable

Advertising

• Daily Active Users

• Monthly Active Users

• Percept Logged-in

• Please define ‘Active User’ properly

Overall

• User Retention is always a Cohort Metric

• I didn’t know about Compounded Monthly Growth Rate at all (CMGR)