The most important metric for consumer startups (and why it isn’t churn) with Kent Bennett - Ep 3

Описание: Key Takeaways
Churn is one of the most misunderstood numbers in venture capital.
The health of a consumer business is best seen in user retention after an initial “getting to know you” period.
A big chunk of customers will almost always drop off after a first product interaction. It’s more important to see whether usage becomes highly predictable and stable over time from returning customers (e.g. Do you see an asymptote in a retention curve showing ongoing predictable engagement from loyal customers?).
Over time you might even see loyal customers’ usage or purchases increase (e.g. the asymptote curves up a bit, or “smiles”).
If however, customer engagement continually declines, even after customers have gotten to know a product, it is almost impossible to build a large business.
In the early days, an influx of customers that drive the novelty of a product may mask a longer-term retention problem. Often startups only spot this “leaky bucket” after fad-driven growth dies down.

Kent Bennett on Consumer Earthquake Startups
Episode 1: Consumer startups are earthquakes not just unicorns
Episode 2: How to build a truly great product to power a consumer earthquake
Episode 3: The most important metric for consumer startups (and why it isn’t churn)
Episode 4: How to calculate Customer Lifetime Value (LTV) for consumer startups and what it really means
Episode 5: Why consumer startups should obsess over their Resting Growth Rate (RGR)
Episode 6: Four core moats of long-term defensibility for consumer startups

Full article: http://bvp.com/atlas/consumer-earthqu...
Get to know Kent Bennett: http://bit.ly/kentbennett
Subscribe to Bessemer’s Atlas: http://bit.ly/subscribe-to-atlas

Song: Knock 'Em Down (Instrumental) by The Shrugs