AI coding startups are grappling with high customer churn, driven by pricing models and project-based services. StackBlitz's CEO, Eric Simons, highlights that churn rates in the sector range from 20% to 40%. The company is adapting its service, Bolt.new, to provide a comprehensive platform with hosting and databases to enhance user retention. Simons notes that more traditional services, like Wix, maintain lower churn by generating recurring revenue from stickier offerings, differentiating the need for a stable business model in the AI coding space.
The churn rate for everyone is really high. You have to build a retentive business. Stronger offerings are needed to keep customers engaged long-term.
In the crowded AI coding market, many startups rely on reselling AI inference... hoping to make a profit on the difference.
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