Colin Barry

Chegg (LTV, Tuesday, Week 5)


Interesting to think about comparison with Rent the Runway. Both e-commerce, but many differences.

Differences/unique Chegg attributes:
-- Seasonality => Chegg makes all its money from 2 three-week periods every year (academic calendar)
-- Digital future => Print textbooks are probably not going to be around forever; (slowly) evaporating core business.
-- Chegg CVP = saving money on textbooks; RTR CVP = "Cinderella moments"
-- Customers have a finite lifespan (undergrads = four years of books) => LTV is limited
-- Customers are REQUIRED to have textbooks (RTR = emotional choice)

Commonality between Chegg and RTR:
-- Teaching new customer behaviors is challenging. Need to articulate process very clearly...
-- Homogenous user base = easy chasm
-- Disruption! (Colin: maybe...)

Capital-intensive startups are hard to manage. End up with a gazillion investors, often many different kinds of investors (angels, VCs, growth equity, etc.) with varied preferences, appetite for risk, etc.