The fastest growing consumer AI companies are now seeing revenue retention above 100% – what I call the “Great Expansion”. This happens in two ways: 1) consumers spending more as usage-based revenue replaces flat “access” fees, and (2) consumers bringing tools into their workplaces at unprecedented speed, where they can be expensed and supported with larger budgets.
The difference in trajectory is dramatic. At 50% revenue retention, a company must replace half its base every year just to stay even. At more than 100%, every cohort is expanding – growth compounding on top of growth.
The question becomes: how can consumer companies seize this opportunity and take part in the Great Expansion?
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