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What StitchFix’s IPO Can Teach Corporate America

Blog — November 27, 2017

By Brett Bivens

One topic that gets discussed a lot here at TechNexus is how we should help the corporate partners that we invest alongside think about making the transition from transactional business models where you sell, say a treadmill, to longer term subscription or subscription-esque services where you're still providing that treadmill but also providing value added services on top of that, that improve over time by including customer data and feedback.

Now this discussion isn't just about what those products and services look like, but also how you communicate that business model shift and the new metrics that come along with it to others in the organization and to the market.

Business model shifts for corporations—especially public companies—are about more than simply offering new products and services. They also necessitate a new communication strategy for helping the organization and the market understand what success means.

That's why the numbers and the charts in StitchFix's S1 and others like it can be so helpful.


So in that S1, StitchFix breaks out customer cohorts, for example, which can be great to understand customer behavior and to predict future cash flows. And that really should be something that every company making the transition from transactional to subscription model that I discussed earlier should be thinking about.

Every company making the transition from transactional to subscription business models should focus on internalizing cohort analyses and understanding what it means for the relationship with their customers.

More disclosures like this really help us get a better benchmark across the industry and generate a broader understanding across the market among executives, investors, and analysts.

This article was originally posted on LinkedIn via Captioned.

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