4 ms·
...how? What was the game plan? Why would they do this?
by CamelCaseName 8y ago
...how? What was the game plan? Why would they do this?
- mrguyorama 8y agoHappened all the time in the dotcom bubble: "We lose money on each sale but we'll make it up in volume!"
- vanadium 8y agoHaving started my career at the start of the dot-com boom (and later bust), that was damn near every startup I came across. Our little agency ended up moving into eTour's space in Atlanta (VaHi) when they departed. Nice movie theatre built into the space.
- LyndsySimon 8y agoCustomer acquisition? In some cases it might make financial sense to lose a small amount of money per customer if the cost per acquisition is more than the amount they're losing. Network effect? I'm not sure this would apply to a clothing retailer, but there are lots of services out there that have a marginal cost per customer but can't effectively monetize until they have a sufficiently large customer base and therefore have access to enough data to be marketable. Exit strategy? A company with x million customers, even if unprofitable and unsustainable in its current state, is worth more than a company with x/n customers that is marginally profitable in many cases. As for this case in particular... I don't know. I suspect that a case could be made that the money they're losing has them in the media enough that they're basically paying for advertising by being unprofitable. I doubt I would have ever heard of MoviePass if not for them being constantly in the news.
- cm2012 8y agoThe CLTV is high in fashion - people return to shops they like over and over. If they're in high growth, they're spending a lot in marketing to get new customers acquainted with the brand.
- deleted 8y ago[deleted]