Ben Gilbert: evaluation

Transcript context

…The customers you retain, you're probably getting double, triple more out of them in the future. Some customers drop off and then you get zero and then that tracks it back down. But I compared the episode we're going to do tomorrow and obviously travel is a totally different category with different use cases and lots of different dynamics. Airbnb also has cohort data in their S-1. They're flat. Flat is impressive, that's good. Most cohort's go down over time but here is a company, in DoorDash, that is not just flat, but upticking and upticking every year that customers stay on the platform. Man, this is like hardcore native advertising in action that we're doing right now, David. The last point I want to make on that is a great point that was done in the S-1 club and the S-1 Club is an awesome sub stack that friends of the show put together that you should check out. You can click the link in the show notes to see that, too, in our sources. An excellent analysis that basically shows it costs about $6 for DoorDash to acquire a customer, and assuming that they stick around for five years and frankly, we don't know how long they're going to stick around, but that seems like a reasonable enough estimate just because the company is so young that DoorDash can earn about $60 in pure profit from them over those five years. That's a 10-1 ratio, and it takes about 16 months for them to recover that six dollars. It sounds like a little bit of money but when you think about you’re ordering all this food, DoorDash is only keeping a small percentage of that, call it 11%-15%. For most people, you're not ordering every night from DoorDash, ordering a few times a month or year. In addition, they're doing a lot of incentive based little subsidies that are trying to get you to get your order. The longer someone sticks around, the more they're going to generate and a lot of that profit is actually back for DoorDash. Yeah, and I think the other important point here, too, that as [...] has written about in the past, a lot about how just looking at payback unmasks a lot of complexity and important things about the business, you've got to think about what the levers are that DoorDash is pulling here. They certainly could do things to generate more profits out of every order that they're getting from customers. They're raising prices and that would make those numbers go up and that would make payback happen faster. If you think about their contribution, the profit margin is based on gross order value right now, 2%? 3%?…

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