{"id":9133,"date":"2022-06-14T08:07:07","date_gmt":"2022-06-14T08:07:07","guid":{"rendered":"https:\/\/andrewdoran.uk\/blog\/?p=9133"},"modified":"2022-06-14T13:29:03","modified_gmt":"2022-06-14T13:29:03","slug":"superfans-and-marginal-customer-acquisition-costs","status":"publish","type":"post","link":"https:\/\/andrewdoran.uk\/blog\/2022\/06\/14\/superfans-and-marginal-customer-acquisition-costs\/","title":{"rendered":"Superfans and marginal customer acquisition costs"},"content":{"rendered":"
Ben Thompson has been running some superb interviews for subscribers of his Stratechery<\/a> newsletter. His recent interview with Michael Nathanson<\/a> of the MoffettNathanson<\/a> research group is no exception.<\/p>\n

I loved this insight about how companies are valued when they are relatively new and growing quickly. Their maths may be over-optimistic as they underestimate the cost of adding marginal customers after their initial rapid rise:<\/p>\n

Ben Thompson: …a mistake a lot of companies make is they over-index on their initial customer. The problem is when you\u2019re watching a company, that customer wants your product really bad, they\u2019ll jump through a lot of hoops, they\u2019ll pay a high price to get it. Companies build lifetime value models and derive their customer acquisition costs numbers from those initial customers and then they say, \u201cThese are our unit costs\u201d, and those unit costs don\u2019t actually apply when you get to the marginal customer because you end up spending way more to acquire them than you thought you would have.<\/p><\/blockquote>\n

Michael Nathanson: That\u2019s my question to Disney, which is, and I think you wrote this \u2014 your first 100 million subs, look at the efficiency of how you built Disney+, it was a hot knife through butter. But now to get the next 100 million subs, what are you going to do? You\u2019re going to add sports, do entertainment, more localized content. My question to Disney is, is it better just to play the super-fan strategy where you know your fans are going to be paying a high ARPU [average revenue per user] and always be there, or do you want to, like Netflix, go broader? I don\u2019t have an answer, but I keep asking management, \u201cHave you done the math?\u201d<\/p><\/blockquote>\n<\/div>\n

Ben Thompson has been running some superb interviews for subscribers of his Stratechery newsletter. His recent interview with Michael Nathanson of the MoffettNathanson research group is no exception. I loved this insight about how companies are valued when they are relatively new and growing quickly. Their maths may be over-optimistic as they underestimate the cost […]<\/div>\n<\/a>","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"webmentions_disabled_pings":false,"webmentions_disabled":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"activitypub_content_warning":"","activitypub_content_visibility":"","activitypub_max_image_attachments":3,"activitypub_interaction_policy_quote":"anyone","activitypub_status":"","footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[42,23,16],"tags":[],"class_list":{"0":"post-9133","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-business","7":"category-podcasts","8":"category-technology","9":"h-entry","11":"hentry"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack-related-posts":[{"id":12411,"url":"https:\/\/andrewdoran.uk\/blog\/2025\/08\/25\/12411\/","url_meta":{"origin":9133,"position":0},"title":"\ud83d\udcda Finished Reading Apple in\u2026","author":"Andrew Doran","date":"25 August 2025","format":"status","excerpt":"\ud83d\udcda Finished Reading Apple in China: The Capture of the World\u2019s Greatest Company by Patrick McGee. I picked this up after hearing Ben Thompson\u2019s interview with the author on Stratechery. It\u2019s a fascinating insight of how Apple\u2019s focus on helping their suppliers to get to where they needed them to\u2026","rel":"","context":"In "Snippets"","block_context":{"text":"Snippets","link":"https:\/\/andrewdoran.uk\/blog\/category\/snippets\/"},"img":{"alt_text":"\"What this book contends is more intriguing\u2014that China wouldn't be China today without Apple. Its investments in the country have been spectacular, rivaling nation-building efforts in cost, man-hours, and impact. Apple itself estimates that since 2008 it has trained at least 28 million workers-more people than the entire labor force of California.\" \u2014 Apple in China, Patrick McGee","src":"https:\/\/i0.wp.com\/andrewdoran.uk\/blog\/wp-content\/uploads\/2025\/08\/DraggedImage.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/andrewdoran.uk\/blog\/wp-content\/uploads\/2025\/08\/DraggedImage.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/andrewdoran.uk\/blog\/wp-content\/uploads\/2025\/08\/DraggedImage.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/andrewdoran.uk\/blog\/wp-content\/uploads\/2025\/08\/DraggedImage.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/andrewdoran.uk\/blog\/wp-content\/uploads\/2025\/08\/DraggedImage.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":8259,"url":"https:\/\/andrewdoran.uk\/blog\/2021\/11\/18\/a-seat-at-the-table\/","url_meta":{"origin":9133,"position":1},"title":"\ud83d\udcda A Seat at the Table","author":"Andrew Doran","date":"18 November 2021","format":false,"excerpt":"I picked up Mark Schwartz\u2019s A Seat at the Table as I have recently been thinking about how we can move away from the perception of our IT team as the people who \u2018turn up and fix the Wi-Fi\u2019 to one where we are seen as true business partners. The\u2026","rel":"","context":"In "Books"","block_context":{"text":"Books","link":"https:\/\/andrewdoran.uk\/blog\/category\/books\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/andrewdoran.uk\/blog\/wp-content\/uploads\/2021\/11\/0EA07B28-131F-4EC2-AD9C-1E5D7559E3D5_1_105_c.jpeg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/andrewdoran.uk\/blog\/wp-content\/uploads\/2021\/11\/0EA07B28-131F-4EC2-AD9C-1E5D7559E3D5_1_105_c.jpeg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/andrewdoran.uk\/blog\/wp-content\/uploads\/2021\/11\/0EA07B28-131F-4EC2-AD9C-1E5D7559E3D5_1_105_c.jpeg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/andrewdoran.uk\/blog\/wp-content\/uploads\/2021\/11\/0EA07B28-131F-4EC2-AD9C-1E5D7559E3D5_1_105_c.jpeg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/andrewdoran.uk\/blog\/wp-content\/uploads\/2021\/11\/0EA07B28-131F-4EC2-AD9C-1E5D7559E3D5_1_105_c.jpeg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":10814,"url":"https:\/\/andrewdoran.uk\/blog\/2024\/04\/07\/weeknotes-267-electricity\/","url_meta":{"origin":9133,"position":2},"title":"Weeknotes #267 \u2014 Electricity","author":"Andrew Doran","date":"7 April 2024","format":false,"excerpt":"A four-day week, but it didn\u2019t feel like it. On Monday our eldest boy turned 17. How I am suddenly a parent to a 17 year old, I really have no idea. It feels no time at all since he turned up in our lives. As usual, we celebrated a\u2026","rel":"","context":"In "Weeknotes"","block_context":{"text":"Weeknotes","link":"https:\/\/andrewdoran.uk\/blog\/category\/weeknotes\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/andrewdoran.uk\/blog\/wp-content\/uploads\/2024\/04\/C9A16DA2-4DE7-4989-B852-850AF8774651_1_105_c.jpeg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/andrewdoran.uk\/blog\/wp-content\/uploads\/2024\/04\/C9A16DA2-4DE7-4989-B852-850AF8774651_1_105_c.jpeg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/andrewdoran.uk\/blog\/wp-content\/uploads\/2024\/04\/C9A16DA2-4DE7-4989-B852-850AF8774651_1_105_c.jpeg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/andrewdoran.uk\/blog\/wp-content\/uploads\/2024\/04\/C9A16DA2-4DE7-4989-B852-850AF8774651_1_105_c.jpeg?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":12884,"url":"https:\/\/andrewdoran.uk\/blog\/2025\/12\/05\/weeknotes-353-right-about-now\/","url_meta":{"origin":9133,"position":3},"title":"Weeknotes #353 \u2014 Right about now","author":"Andrew Doran","date":"5 December 2025","format":false,"excerpt":"Another packed week, brimming with meetings. 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(I'm convinced that many of us have had this experience as a child, coming home sick from school in the middle of the day and finding that our home feels strange.)\u201d \u2014 Jenny Odell, How to Do Nothing","src":"https:\/\/i0.wp.com\/andrewdoran.uk\/blog\/wp-content\/uploads\/2025\/12\/DraggedImage.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/andrewdoran.uk\/blog\/wp-content\/uploads\/2025\/12\/DraggedImage.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/andrewdoran.uk\/blog\/wp-content\/uploads\/2025\/12\/DraggedImage.png?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/andrewdoran.uk\/blog\/wp-content\/uploads\/2025\/12\/DraggedImage.png?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/andrewdoran.uk\/blog\/wp-content\/uploads\/2025\/12\/DraggedImage.png?resize=1050%2C600&ssl=1 3x, https:\/\/i0.wp.com\/andrewdoran.uk\/blog\/wp-content\/uploads\/2025\/12\/DraggedImage.png?resize=1400%2C800&ssl=1 4x"},"classes":[]},{"id":10112,"url":"https:\/\/andrewdoran.uk\/blog\/2023\/05\/20\/10112\/","url_meta":{"origin":9133,"position":4},"title":"\ud83c\udf99\ufe0f Brilliant interview with my\u2026","author":"Andrew Doran","date":"20 May 2023","format":"status","excerpt":"\ud83c\udf99\ufe0f Brilliant interview with my friend Nicola Thompson, former CEO of Made.com. I can't imagine waking up every day through such a challenging time with the weight of a listed company on my shoulders.","rel":"","context":"In "Snippets"","block_context":{"text":"Snippets","link":"https:\/\/andrewdoran.uk\/blog\/category\/snippets\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":862,"url":"https:\/\/andrewdoran.uk\/blog\/2015\/05\/19\/barriers-forms-and-looking-after-your-customers\/","url_meta":{"origin":9133,"position":5},"title":"Barriers, forms and looking after your customers","author":"Andrew Doran","date":"19 May 2015","format":false,"excerpt":"I pay London Midland nearly \u00a34,500 for my annual season ticket. On Monday morning after arriving in London, bleary-eyed and limping along from my weekend's cycling, I discovered that I had left my ticket in the wrong wallet. 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