We see consumer whales in non-subscription models such as gaming and fashion e-com (where majority of revenue often comes from <10% customers). I wonder if consumer subscription companies are missing a trick by not offering a way for those would-be whales to pay more for enhanced value? They usually offer 2-3 tiers, and we're seeing 10x pricing with the $200/mo o3 tier - but perhaps this is far less extreme than it could be?
1. I'd put e-comm in an altogether different category of consumer subscription because selling physical goods introduces scaling constraints that don't exist in software and services. I might go deeper into this in a future post so thanks for the idea.
2. The majority of revenue comes from <10% of customers because subscription (at least the way we approach subscription today) vastly under-monetizes the total potential customer base, not because there are whales. The answer for why there are (on a relative basis) whales in gaming is in your comment itself-- they don't monetize via subscription. Even still, I wouldn't call these whales.
The interesting thing about CSS that we're totally overlooking is that these are businesses where user growth is hyper-scalable beyond anything we've ever seen before. Subscription on the other hand? Not scalable.
We see consumer whales in non-subscription models such as gaming and fashion e-com (where majority of revenue often comes from <10% customers). I wonder if consumer subscription companies are missing a trick by not offering a way for those would-be whales to pay more for enhanced value? They usually offer 2-3 tiers, and we're seeing 10x pricing with the $200/mo o3 tier - but perhaps this is far less extreme than it could be?
Thanks for commenting! A few thoughts:
1. I'd put e-comm in an altogether different category of consumer subscription because selling physical goods introduces scaling constraints that don't exist in software and services. I might go deeper into this in a future post so thanks for the idea.
2. The majority of revenue comes from <10% of customers because subscription (at least the way we approach subscription today) vastly under-monetizes the total potential customer base, not because there are whales. The answer for why there are (on a relative basis) whales in gaming is in your comment itself-- they don't monetize via subscription. Even still, I wouldn't call these whales.
The interesting thing about CSS that we're totally overlooking is that these are businesses where user growth is hyper-scalable beyond anything we've ever seen before. Subscription on the other hand? Not scalable.