Check out Sara Lacy’s interview with Fred Wilson on PandoMonthly. Fred’s comments on e-commerce are especially interesting. Forward to the 1:20.00 mark for the e-commerce Q&A.

I completely agree with his thesis for investing in marketplaces over e-retailers. This is exactly why I joined Amazon’s Merchant Services business last month.

I also think he is spot on when he states that “Most e-commerce companies fool themselves into thinking that the lifetime value of their customer is in excess of their acquisition cost when it’s not…and the only reason that they stay in business is that venture capitalist keep getting seduced into thinking that too…giving them money at higher and higher prices and then the whole thing is eventually revealed to be an emperor that has no clothes.”┬áLearn more about the LTV/CA ratio in my previous post: The Most Important Formula for Startups.