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mysterious guyย โขย 6m
CAC vs LTV โ The Unit Economics Every Founder Must Know Youโre getting users. Youโre spending on ads. But is your startup actually making money per customer? If your CAC is higher than your LTV, youโre not building a business โ youโre burning cash. Breakdown: 1๏ธโฃ CAC (Customer Acquisition Cost) = How much you spend to acquire one customer. Includes: ads, sales team costs, tools, etc. 2๏ธโฃ LTV (Lifetime Value) = How much revenue a customer brings over their entire relationship with your product. 3๏ธโฃ The Golden Rule: ๐๐ง๐ฉ / ๐๐๐ ๐๐ต๐ผ๐๐น๐ฑ ๐ฏ๐ฒ > ๐ฏ. If itโs not, youโre paying too much or not retaining well. Example: CAC = โน1,000 LTV = โน2,000 โ โ (Unsustainable) LTV = โน4,000 โ โ (Healthy growth) Why this matters: You can grow fast and still fail if you donโt get this ratio right. Growth without margin = doom in disguise. Quick Tip: Donโt just track CAC once. Ad costs change. Behaviors change. Monitor it monthly. ๐๐ง๐ฉ ๐๐ฒ๐น๐น๐ ๐๐ผ๐ ๐๐ฎ๐น๐๐ฒ. ๐๐๐ ๐๐ฒ๐น๐น๐ ๐๐ผ๐ ๐ฐ๐ผ๐๐. ๐ ๐ฎ๐ฟ๐ด๐ถ๐ป ๐ถ๐ ๐บ๐ฒ๐ฎ๐๐๐ฟ๐ฒ๐ฑ ๐ถ๐ป ๐๐ต๐ฒ ๐ด๐ฎ๐ฝ.
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