Great read!

How do you discount the customer value? What is the most appropriate discount rate and what is the time horizon over which the discounting would be done?

Since the future customer value would be spread across a long period for different kind of startups, how to arrive at the most appropriate time period?

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Tanay, nice work.

I think you have done a good job of outlining customer-based valuation.

A couple of suggestions of things that I would consider a little differently.

Firstly, the Bain graphic seems confusing to me -- discounting clearly happens somewhere to get to 'present value' but I would much prefer it to be explicit. (This is probably less of a concern for finance/marketing people but plenty of marketers forget to discount -- I'd like to be more upfront in discouraging that).

More substantially the argument that "all costs should be considered" makes sense for external analysis but not for the internal analysis that you recommend. I am reminded of the confusion in Selden and Covin's Angel Customers and Demon Customers (https://www.amazon.com/Angel-Customers-Demon-Discover-Turbo-Charge/dp/1591840074/). Full costs allocation is a major challenge for internal decision-making.

Finally, I'd move "Increasing the number of existing customers by acquiring new customers." I don't think this is, by definition, should come under "Increasing value from the existing customer base" given it is not related to the existing customers.

Still nice work on a clear summary.

Neil Bendle, Associate Professor, University of Georgia, https://neilbendle.com/

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