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How to value a company: XERO (ASX: XRO) Pt. 2

Equity Mates Investing Podcast

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The Business Model for Zero

With zero, you get locked in basically because you don't want to give up the software. So it's super sticky and you can only have a successful subscription business if the thing that you're selling is sticky. And then all of a sudden you go from having 10,000 subscribers, 100,000 a million, three million. That's when you really see that revenue just rocket straight up like that inflection, that exponential growth. It takes years for all of those subscribers to stack and layer on top and top and top.

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