Why conversion matters – a toy model

1 · Erik Bernhardsson · Oct. 30, 2017, 4 a.m.
There are often close relationships between top level business metrics. For instance, it’s well known that retention has a super strong impact on the valuation of a subscription business. Or that the % of occupied seats is super important for an airline. A fun little toy model that I can up with generates a curious relationship between conversion rates and revenue. The intuition Let’s look at an ecommerce company. I’m working at a company that does mortgage online, for instance. My intuition is...