1/ John Malone invented the business model for "software as a service" or SaaS. What did Malone mean when he said: "I used to go to shareholder meetings and someone would ask about earnings, and I’d say, ‘I think you’re in the wrong meeting.’ That’s the wrong metric."
2/ What John Malone (and others like Craig McCaw) understood was that in a subscription business the customer acquisition cost happens up front and the value for the shareholders accrues in the form of recurring payments over time. The investment produces an accounting loss.
3/ Investments made in acquiring and serving customers enables the business to defer taxes since it is generating wealth for shareholders even though taxes are being deferred due to the accounting loss. This systems works best if free cash flow from the business is positive.
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