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JerseySquare Revenue - How to Build a Startup

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    Well, the other interesting things that we have the teams do,
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    and the JerseySquare guys was a great example,
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    is to the start to put together the unit economics,
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    the metrics that matter for both revenue and cost.
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    So, then we're going to take the annual subscription revenue, $199,
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    and see what their business looks like.
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    So they assumed that the cost of a jersey with 25% off to them,
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    that is, to JerseySquare was $150.
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    They think they'll be able to rent it five times during the year
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    but their shipping cost was about $9, their cleaning cost a dollar
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    processing cost a dollar
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    and their customer acquisition and activation cost $25 a team
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    and so if you take a look at their unit costs
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    you add all this up
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    it's $230 but their revenue was only $199.
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    Why would they do this? 'Cos they were going to lose $31 a year?
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    Well, remember this was to acquire a customer.
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    But what you need to look at is the customer lifetime value.
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    What happens when this customer renews for the next year?
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    Well, in the next year, you don't have that jersey cost
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    because you're still turning that jersey.
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    He might have only used it two or three or four times.
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    and you don't have the customer acquisition cost
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    because you already acquired that customer.
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    You still have your shipping, cleaning and processing costs
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    but your unit costs are now $55
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    and if you get 60% retention, your net for those customers who stay longer than a year is $86.
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    You can immediately see some of the fallacies
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    in these first back of the envelope calculations.
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    What if they use the jerseys seven times a year?
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    You're actually buying more jerseys per year
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    and actually you're losing money in year two, three and four
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    so you might want to be limiting the number of times
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    you can actually rent a jersey in a year
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    or you could just be changing your revenue model.
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    But this is a good visual way to start thinking about
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    how to start doing the math for metrics that matter.
Cím:
JerseySquare Revenue - How to Build a Startup
Leírás:

11-14 JerseySquare_Revenue

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Video Language:
English
Team:
Udacity
Projekt:
EP245 - Lean Launchpad
Duration:
02:06
Udacity Robot edited Angol subtitles for 11-14 JerseySquare_Revenue
Udacity Robot edited Angol subtitles for 11-14 JerseySquare_Revenue
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