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Almost everyone running a business today sees this in some form:
"Meituan-Dianping and Ele are using highly subsidized meal delivery as part of their entrée into a whole host of other commerce services, including other deliveries and payments."
COGS being transformed into CAC.
"Meituan-Dianping and Ele are using highly subsidized meal delivery as part of their entrée into a whole host of other commerce services, including other deliveries and payments."
COGS being transformed into CAC.
Bill Gurley: "If a disruptive competitor can offer a product or service similar to yours for 'free,' and if they can make enough money to keep the lights on, then you likely have a problem.”
Often the profit/cash flow comes from a complementary service that is cross-sold.
Often the profit/cash flow comes from a complementary service that is cross-sold.
If all business X sells is the product or service that is being used as in-kind CAC substitute, it must find something else to sell that will produce positive overall unit economics including cash flow. Beware competitors that decide to make what you sell into a loss-leader.
