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Not every direct-to-consumer business should be a subscription service. Many try to be, and for good reason—subscription businesses often have more predictable revenue than other businesses, they allow you to acquire a customer once and then have a long-term paying relationship with them, and they can quickly create enormous enterprise value. However, in evaluating whether this model is right for a particular business, entrepreneurs need to have an intimate understanding of the immutable force governing their success—churn. Having run and invested in quite a few consumer subscription businesses over the years (eMusic and Dollar Shave Club being the most well-known), I have put together a view on churn that I am happy to share.

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