Thanks James, really enjoyed reading this. Just wanted to share some questions, given the budget constraints in sales, promotions, and marketing, will this not slow down growth of DH? especially since a large percentage of their traction is inflated by vouchers and discounts, this could destabilise their unit economics at scale. My second question is on the logic of EBITA and profitability, shouldn't EBITA be based on profitability of revenue rather than profitability of GMV?
Growth will definitely slow down. Revenue is a function of take rate (% of GMV). There are many levers which mgmt can pull to change the take rate and many levers which mgmt can pull to change the cost structure. This will probably look different in each market, but the goal overall is the same: experiment and tweak the model to work towards profitability as the volumes mature. It's a vague answer, which is perhaps unsatisfying, but so is the thesis to a certain extent.
This is really great
Thank you!
Thanks James, really enjoyed reading this. Just wanted to share some questions, given the budget constraints in sales, promotions, and marketing, will this not slow down growth of DH? especially since a large percentage of their traction is inflated by vouchers and discounts, this could destabilise their unit economics at scale. My second question is on the logic of EBITA and profitability, shouldn't EBITA be based on profitability of revenue rather than profitability of GMV?
Growth will definitely slow down. Revenue is a function of take rate (% of GMV). There are many levers which mgmt can pull to change the take rate and many levers which mgmt can pull to change the cost structure. This will probably look different in each market, but the goal overall is the same: experiment and tweak the model to work towards profitability as the volumes mature. It's a vague answer, which is perhaps unsatisfying, but so is the thesis to a certain extent.
Excellent stuff. Do you have Twitter?
Only a secret account!
Nice, well I enjoyed this write-up, thanks!