michael greenberg
CLV as the Best Metric for Company Valuation - Kauffman Fellows
The proliferation of DTC, SaaS, and subscription-based companies has had many venture capitalists and investors to call for a better valuation strategy. Traditional DCF models have often required investors to take leaps of faith over blindspots that, according to the Retina team, can be avoided. We spoke with Retina.AI Founders Michael Greenberg (CEO) and Brad Ito (CTO) about how customer lifetime value (CLV) can be used to provide a much more accurate representation of a company's valuation than historical metrics such as a DCF. Retina urges its users to "Focus on the right customer, not the "right now" customer" by developing an incredibly intimate understanding of total predictive customer lifetime value, or the amount of money a customer will spend over the course of their lifetime. Retina's machine learning model combines recency, frequency, and magnitude (RFM), as well as churn rates to map out accurate customer journeys.