I’m not alone. A 2015 Rock Health survey of thousands of internet-connected U.S. adults showed that 71% of us search online for health information. And yet, that same survey shows that we don’t actually trust these sources of health information. Something is not right. Something needs to change.
Often as a VC you are presented with a headline CPA figure and nothing more. This can look good on the surface but mask underlying issues. For example, take an early stage eCommerce business with an LTV of €30 and an overall CPA of €20. This looks like a solid business. Digging deeper, 50% of users are acquired through free channels (PR, SEO) and so the CPA for the remaining 50% (acquired through SEM) is €40. The free channels are often hard to scale up rapidly, so if the company wants to grow fast post-investment the obvious route is SEM. However, in this case customer acqusition through SEM is uneconomic (LTV of €30 is less than CPA of €40). As a VC you then start to worry about whether this business can grow fast in a rational way.