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billyjoerob

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  • Care.com: Meaningless Press Releases Are Not A Good Sign [View article]
    At an investor conference she broke out the costs:

    Cost of acquiring new Care customer: $167
    Gross revenue of new Care customer in first 12 months: $167
    Cost of acquiring new payments customer: $101(*total new users)
    Cost of reacquiring customer: ~$65
    Total customer acquisition cost: ~$333 (or equivalent to 9 months X $37)
    Estimated new customers spend: $10M
    Payments cac: ~$3.8M/3800 new users
    Care cac: ~$6.2M/37000 new users

    So I arrived at the 40% figure by dividing payments cac ($101) by total new customer cac ($268), so it's about 38%. Care shifted to payments because the ROI is much higher. No point in investing in new customers before the new mobile apps roll out.

    You make good points about the members not being as mobile as the providers. I've seen lots of complaints from the providers that Care is now charging them, which is obviously a better business model for Care. Now maybe mobile isn't that important. But new customers are probably not middle aged, they are younger than the average Care customer, and grew up on mobile. They don't want to go back to a desktop to sign up and etc. So the shift to mobile does affect the new customer cac, probably to a significant extent, but maybe doesn't affect the reacquisition cost. But the market is probably much more interested in the new cac and not the reacquisiiton cost.
    Aug 2, 2015. 12:32 PM | Likes Like |Link to Comment
  • Care.com: Meaningless Press Releases Are Not A Good Sign [View article]
    Looking back at Care since the IPO, I think Care suffered from an almost overnight shift in user behavior. Almost from the day Care went public, users shifted from desktop to mobile. In 2003, desktop was 60%, now it's less than 40%. Care was not prepared for that shift, so it pivoted to building the payments business. My estimate is that 40% of new member marketing expense is dedicated to payments. That explains why marketing spend was shifted so dramatically to 1H in 2014 and 2015, because that's tax season. Now that Care does have a viable app (now with video chat), mobile marketing is more valuable. So that explains letting up on growth since IPO. Also, management wants to meet the 2016 profitability target, and payments is more immediately profitable. So investing in payments customers made sense, but didn't produce the rapid revenue and user growth that investors were expecting.
    Aug 1, 2015. 02:16 PM | Likes Like |Link to Comment
  • Should You Care.com?  [View instapost]
    Some of the numbers in this post could be clearer. At a subsequent conference, the CEO clarified the number somewhat.

    Cost of acquiring new Care customer: $167
    Gross revenue of new Care customer in first 12 months: $167
    Cost of acquiring new payments customer: $101
    Cost of reacquiring customer: ~$65
    Total customer acquisition cost: ~$333 (or equivalent to 9 months X $37)


    So the total cost to acquire a new customer for core matching/payments biz is $268. That means 38% of all new customer acquistion cost is in the payments business, which isn't an exciting business. It's a tax business. Care has focused on this business because it's a profitable business that helps to meet the "profitable by 2016" promise but doesn't grow the business at the speed investors expected.
    Jul 31, 2015. 02:54 PM | Likes Like |Link to Comment
  • Care.com: Meaningless Press Releases Are Not A Good Sign [View article]
    The great thing about the market is that we don't have to wonder who's right, Care will release earnings soon enough.
    Jul 15, 2015. 04:23 PM | Likes Like |Link to Comment
  • Control4: Intensified Competition Leads To Terminal Challenges [View article]
    "The absolute key unique value of Control4 is the software/hardware integration of so many devices.


    This value needs to be unlocked!"

    Are you talking about the Control4 app store? How would this value be unlocked?
    Jul 15, 2015. 07:57 AM | 1 Like Like |Link to Comment
  • Control4: Intensified Competition Leads To Terminal Challenges [View article]
    Maybe Microsoft can automate my home right after it figures out a printer installation that doesn't require a driver download. This problem is much harder than it looks.
    Jul 14, 2015. 07:12 PM | Likes Like |Link to Comment
  • Care.com: Meaningless Press Releases Are Not A Good Sign [View article]
    "the growth in revenue is directly tied to the marketing expenditure"

    That's increasingly less true. Care's marketing expense per customer is like a long steep hill that declines very rapidly once the top is reached. That's not true of all SaaS companies. A SaaS company like Box probably doesn't get that much more efficient at marketing from the first to the last customer. Match enjoyed immediate demand for the service and initial marketing cost per user was low but barriers to entry (OKCupid, PoF, Tinder, etc) are also low. Care has to create the market for its service. But once the market is created and that initial investment *in each city* is made, marketing costs head straight down. You say that everyone is already familiar with it, but that's really not true. Phoenix is largely virgin territory, accoding to Google data. That's the fifth largest city in the US.
    Jul 14, 2015. 08:28 AM | Likes Like |Link to Comment
  • Care.com: Meaningless Press Releases Are Not A Good Sign [View article]
    This is a good discussion by SLM about the ongoing nature of the need for Care. Go to 53:23 if it doesn't open there.

    http://bit.ly/1UOVLDX
    Jul 11, 2015. 04:50 PM | Likes Like |Link to Comment
  • Care.com: Meaningless Press Releases Are Not A Good Sign [View article]
    So I'll just go through your points in no particular order:

    - Is Chelsea Boston? Anyway, the point is that SC is still going strong in a few important cities like Chicago, Boston and DC.

    - Sittercity is probably not profitable. Glassdoor reviews of SC say that the company is losing money, starts and stops projects, is stuck with a "tough tech stack," and the CEO is a snake oil salesman. Sounds like management is biding time until it gets bought out. Urbansitter was a potential acquirer but not now that Match Group (which invested in Urbansitter) is going public.

    - The problem with dating sites is that the better the site is at connecting daters, the faster they leave the site. That and the barriers to entry in dating are very low. As the Care site has improved, usage has increased. Usage is about 9 months over a 4 year window. It will continue to increase.

    Usage of Care will increase as the product improves and people get familiar with it. My sister was saying that some of her friends were complaining that all their disposable income goes to the sitter. The demand is there and luckily for Care, there is room for only one company.
    Jul 11, 2015. 10:46 AM | Likes Like |Link to Comment
  • Care.com: Meaningless Press Releases Are Not A Good Sign [View article]
    Well this is Sittercity astroturf marketing, but it says that Sittercity has 660 listings in Boston vs. 246 for Care.

    http://bit.ly/1Tqj8lA

    That is also corroborated by the Google trends stats, which show that Sittercity maintains strongholds in the northeast and Chicago. The continued success in Care's backyard shows just how difficult it is to compete with an established platform.

    If you look at the Google trends stats by city and then use the "over time" feature, you'll see that Care will blitz a city with advertizing (probably TV advertizing) for a short period of time in order to establish critical mass. There might come a time when it's a national platform, but right now it's definitely a city-by-city battle.

    Attrition is a problem, but sitting is not like dating, where singles sign up once and never return. The service Care provides is a backup for when the primary provider is not available. Parents return when they need a new sitter or during summer vacation, etc. So customers definitely do return over and over again, and that figure is going up.
    Jul 10, 2015. 12:31 PM | Likes Like |Link to Comment
  • Care.com: Meaningless Press Releases Are Not A Good Sign [View article]
    I hope the author doesn't mind my inserting my thoughts on Care into this comment thread.

    Care has essentially two kinds of new customers - new customers in new markets and new customers in old markets. The problem with creating two sided markets is that both sides are necessary, and the first customers are the most expensive ("hey, where is everybody?"). But once the city is established, the cac reaches a new equilibrium. So when we see the high marketing costs, that's largely to establish markets in new cities, not to acquire new customers in established markets. And Care is fighting on two fronts - against SitterCity in the established markets (Care is still number 2 in Boston) and in the new markets. But once both battles are largely won, the cac should fall, and quite rapidly.

    This may be obvious to some people, but I think it partly explains why Care's costs are still so high.
    Jul 9, 2015. 11:21 AM | Likes Like |Link to Comment
  • Why I Am Buying Natuzzi Hand Over Fist [View article]
    THere is no reason for Natuzzi to trade on US markets. This has been a dog since the 90s. It's just a sleepy, Italian, family-owned business in a commodity market. HI has some good ideas but this is not even a value trap, it's just a trap.
    Jul 9, 2015. 06:21 AM | 9 Likes Like |Link to Comment
  • Care.com: Meaningless Press Releases Are Not A Good Sign [View article]
    Just signed up for my Care account on my android phone. Mobile registration took a few minutes, worked well. That should provide a nice boost to registration numbers in Q3. Now I get Care emails every few minutes.
    Jul 7, 2015. 09:25 PM | Likes Like |Link to Comment
  • Niska Gas Storage cut to Sell with $0 price target at Citigroup [View news story]
    good call hector
    Jun 15, 2015. 08:16 AM | Likes Like |Link to Comment
  • Care.com: Realization That Modern Sales And Marketing Programs Can Be Effective Is Progress? [View article]
    it's funny how emotional the reaction to care.com is. maybe it's the female ceo that vexes people. let's look at care's seo marketing. a search for 'pet sitting' turns up care at 2 in the search results after yelp. dogvacay and rover.com, which have received nearly 100 million in vc funding, are further down. and that's not even care's primary business. or let's look at homecleaning. care's result is just 3 down from homejoy, which has received 38 million in vc funding. ok, which would you rather own - dogvacay, rover and homejoy at roughly 138 million in vc funding, or care, which can be purchased in the open market for an enterprise value of less than 125 million. not to mention care's solid tax business, which is probably worth about 80 million. if care were still private it would probably be one of the hottest ipos of 2015. care is a vc investment at a discount to what the vc's paid. don't confuse a stock and a company.
    Jun 5, 2015. 05:40 AM | 4 Likes Like |Link to Comment
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