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Here's a piece of the S1 that I haven't yet seen cited:

"To demonstrate the economics of our business model, we have compared the revenue and gross profit generated from the North American subscribers we acquired in the second quarter of 2010, which we refer to as our Q2 2010 cohort, to the online marketing expenses incurred to acquire such subscribers. The Q2 2010 cohort is illustrative of trends we have seen among our North American subscriber base. The Q2 2010 cohort included 3.7 million subscribers that we initially spent $18.0 million in online marketing to acquire in the second quarter of 2010. In that quarter, we generated $29.8 million in revenue and $12.8 million in gross profit from the sale of approximately 1.2 million Groupons to these subscribers. Through March 31, 2011, we generated an aggregate of $145.3 million in revenue and $61.7 million in gross profit from the sale of approximately 6.3 million Groupons to the Q2 2010 cohort. In summary, we spent $18.0 million in online marketing expense to acquire subscribers in the Q2 2010 cohort and generated $61.7 million in gross profit from this group of subscribers over four quarters."

A typical cohort that returned >3x what it cost? Sounds like a good business to me.




You are missing some things:

1. Costs to gain subscribers goes up each quarter 2. Costs to retain subscribers goes up each quarter 3. Marketing costs to get deals for subscribers goes up each quarter

Costs to retain subscribers is missing..what part of loss is that? Do not know have not finished reviewing the S1..

and other difference compared to Amazon..Amazon founders did not attempt a cash out during the loss years...




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