After a long thread around number of subscribers, subscription growth rate, and the $50,000 number, I wasn’t sure who to reply to, so thought it best to just start a new thread.
While everyone is bringing up valid concerns, one thing to keep in mind - $50,000 spend is just what they consider a customer. They didn’t say that is where x % of their customers start at. We can see they do have massive up selling. We can see at some point or spend level that will stop, or at least slow down.
I don’t think we have seen anywhere, or know at what point the average customer “starts”. While it is not prudent to ignore the potential growth issues and problems adding new customers, I think it wise to look at $50,000 as just what they say - a customer. Not the average starting point for majority of their customers.
Just my thoughts,
The key point here is that we have no idea of the shape of the curve. With SHOP we know that there is a long tail of very small customers who contribute little to the bottom line … might even be a net cost in year one. But, we also know … less precisely than we wish to … that there are a significant number of people spending a lot of money which means that there is significant revenue growth. With PVTL, we have no visibility to the shape of the curve. We know only that they don’t even count someone until they are spending $50,000 … which certainly is a non-trivial investment … but we have no idea of the shape of the curve above that. One can certainly be unhappy about the fact that we have no idea of that shape … clearly having the bulk of the income coming from a handful of customers represents a kind of risk which is different from having a much broader group contributing to the bulk … but focusing on the cutoff is pretty meaningless. At best it means that they are not counting door kickers.