The 2 Data Points That Shopify & BigCommerce Never Discloses
There are two stats that you never hear on Shopify and Bigcommerce earnings calls.
Number of accounts with zero sales
Subscriber cancellations
SaaS providers don't like to talk about this. More fun to discuss "Net Negative Revenue Churn". Meaning the replacement revenue coming in more than makes up for the lost customers. And since revenue is $$, who cares about subscriber counts?
The simple reason is because of the above. Likely an astonishing number of their accounts are in that bucket - I suspect 10-20% though I could never prove it.
Two reasons it might matter later:
If you get more quality subscribers, it means Shopify is slowly moving up-market. Their CFO over time determines the remaining merchants can pay more for services, and bingo - the ingredients for low-end disruption by an entry-level player.
There is another reason that Shopify wants everyone to be an entrepreneur, and that's because of churn. Retail is hard. Lots of retailers go out of business every year. But the number of people that start new businesses is not unlimited.
What's the addressable market size? Sometimes I like to think about what happens when trends play out over years, and the challenge with these dynamics is they are extremely hard to stop.
