My 2 cents... The future of holding companies will be built around audiences, not industries.
Once you have a paying consumer, you can then up-sell them into different brands, rather than spending $XX per new customer.
Once you have a paying consumer, you can then up-sell them into different brands, rather than spending $XX per new customer.
If under the same "umbrella", @stitchfix, @renttherunway, @soulcycle could all be sold to the same audience.
Today, they all spend money, individually, acquiring (likely) the same customers on the same platforms. Bidding against each other ends up increasing CAC's for everyone.
Today, they all spend money, individually, acquiring (likely) the same customers on the same platforms. Bidding against each other ends up increasing CAC's for everyone.
On the brand level, as brands "blow up" and become successful, they will begin to create new digitally native vertical brands (DNVBs) remarketing to the same audience, but with new solutions for that consumer.
According to @socialcapital's annual letter, @chamath says that about $0.40 of every VC dollar raised goes toward user acquisition. The constant bidding creates outrageous prices leading to a 'big bill that will soon come due.'
.@WarrenBuffett compares this type of arms race to being at a parade:
1. Imagine you're among a big crowd
2. You stand on your tiptoes for a better view
3. Then, everyone begins to stand on their tiptoes
4. Now you're worse off than when you started
That's user acquisition.
1. Imagine you're among a big crowd
2. You stand on your tiptoes for a better view
3. Then, everyone begins to stand on their tiptoes
4. Now you're worse off than when you started
That's user acquisition.
Lots of very interesting insights along with this concept, starting on page 6 of @chamath's letter. Read it here: s3-us-west-2.amazonaws.com/socialcapital-…
