Psychic CAC

CAC can be a ‘hard’ expense: Zappos, college students, or Peloton. CAC can be ‘soft’ too: F1 racing or American Pickers merchandise. Another ‘soft’ form is take rate. The take rate on Amazon is 15%. AirBnb hosts pay 3%. Psychics pay 75%! That’s huge!! Maybe.

Huge relative to what? Mills Snell smartly asks just that. “Like AirBnb, a two sided marketplace opens up monetization. Before someone puts their house on AirBnb they aren’t making any money. I think to the psychic it’s something similar. Their customer acquisition is people driving by and word of mouth. Maybe they’re willing to lose 75% of the revenue because they’re turning on so much potential revenue that they did have access to otherwise.”

Marketplaces are great businesses to own especially when they compete with non-consumption.

Every business approaches the CAC crossing. One way to pay the crossing tax is to advertise. Another is the marketplace take rate.

But there’s also the elusive word of mouth bypass, which like actual unicorns is quite rare.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.