Simple: In name only

by. Ron Shevlin

Congrats to the Simple team on their sale to BBVA.

But truth be told, I never was a big fan of what they were doing. Maybe that’s too strong a statement. It’s not that I wasn’t a “fan,” it’s that I didn’t buy into all the hype, all the talk about the NeoBank being “disruptive.” Selling out to a big bank for $117 million doesn’t exactly strike me as qualifying as a banking industry disruptor.

Coming on the heels of Facebook’s $19 (or 17) billion acquisition of WhatsApp, the Simple acquisition immediately drew comparisons of what the acquisition cost per customer was to the acquiring company.

Understandable, but completely misguided.

Cost per customer is a totally useless metric without taking into consideration: 1) Current revenue per customer; and 2) Future potential revenue per customer.

WhatsApp’s main revenue source is an annual subscription fee of $1 (after one free year of use). I’m not even sure if Simple charges a monthly fee to its customers, or if it relies on interchange fees for revenue.

In any case, Facebook has its own ideas for how they will further monetize the WhatsApp user base, and I have no idea what those ideas are, nor do I care.

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