Back
mg
mysterious guy • 1m
CAC vs LTV – The Unit Economics Every Founder Must Know You’re getting users. You’re spending on ads. But is your startup actually making money per customer? If your CAC is higher than your LTV, you’re not building a business — you’re burning cash. Breakdown: 1️⃣ CAC (Customer Acquisition Cost) = How much you spend to acquire one customer. Includes: ads, sales team costs, tools, etc. 2️⃣ LTV (Lifetime Value) = How much revenue a customer brings over their entire relationship with your product. 3️⃣ The Golden Rule: 𝗟𝗧𝗩 / 𝗖𝗔𝗖 𝘀𝗵𝗼𝘂𝗹𝗱 𝗯𝗲 > 𝟯. If it’s not, you’re paying too much or not retaining well. Example: CAC = ₹1,000 LTV = ₹2,000 → ❌ (Unsustainable) LTV = ₹4,000 → ✅ (Healthy growth) Why this matters: You can grow fast and still fail if you don’t get this ratio right. Growth without margin = doom in disguise. Quick Tip: Don’t just track CAC once. Ad costs change. Behaviors change. Monitor it monthly. 𝗟𝗧𝗩 𝘁𝗲𝗹𝗹𝘀 𝘆𝗼𝘂 𝘃𝗮𝗹𝘂𝗲. 𝗖𝗔𝗖 𝘁𝗲𝗹𝗹𝘀 𝘆𝗼𝘂 𝗰𝗼𝘀𝘁. 𝗠𝗮𝗿𝗴𝗶𝗻 𝗶𝘀 𝗺𝗲𝗮𝘀𝘂𝗿𝗲𝗱 𝗶𝗻 𝘁𝗵𝗲 𝗴𝗮𝗽.
Replies (2)
More like this
Recommendations from Medial
Swapnil gupta
Founder startupsunio... • 1m
✅ Must for Business Students 🥇10 Most Important metrics that are asked by investors. 1. Revenue Growth Rate 2. Monthly Recurring Revenue (MRR) 3. Burn Rate 4. Cash Runway 5. Gross Margin 6. Customer Acquisition Cost (CAC) 7. Customer Lifetime Val
See More
Vivek Joshi
Director & CEO @ Exc... • 1m
Mastering Unit Economics Unit economics isn’t just a metric—it’s your startup’s financial DNA. It reveals whether each customer adds value or drains cash. Here’s how to build your unit economics from scratch: 1. Define Your Economic Unit What drives
See More
Vivek Joshi
Director & CEO @ Exc... • 1m
Unlock the secrets of startup success with our comprehensive guide on Decoding Unit Economics! In this video, we break down the critical components that can determine the fate of your early-stage venture. Learn how to define your unit, calculate Cust
See More
Chamarti Sreekar
Passionate about Pos... • 2m
7 Essential Metrics Every Startup Should Track 1. Customer Acquisition Cost (CAC) https://www.investopedia.com/terms/c/customer-acquisition-cost.asp 2. Lifetime Value (LTV) https://www.investopedia.com/terms/c/customer-lifetime-value-clv.asp 3. Bu
See More
Swapnil gupta
Founder startupsunio... • 1m
🥇10 Most Important metrics that are asked by investors. 1. Revenue Growth Rate 2. Monthly Recurring Revenue (MRR) 3. Burn Rate 4. Cash Runway 5. Gross Margin 6. Customer Acquisition Cost (CAC) 7. Customer Lifetime Value (LTV) 8. Churn Rate 9. Unit
See MoreVivek Joshi
Director & CEO @ Exc... • 1m
Decoding Unit Economics for Early-Stage Startups Unit economics is your startup’s compass. It tells you if scaling will make you rich—or broke. Here’s how to decode it, step by step: 1. Define a Unit: This could be a customer, order, or subscriptio
See More
PRATHAM
Experimenting On lea... • 1y
WTF is CAC (Customer Acquisition Cost)❓🤔👀 Let me explain this, Customer Acquisition Cost (CAC) is a key business metric that represents the total cost of acquiring a new customer. So, This includes all the costs associated with sales and marketing
See More
Nikhil Raj Singh
Serial Entrepreneur ... • 3m
Whenever any Investor evaluates a startup then they focus on these criteria.. 1. A team with relevant experience is super important- their past working experience, educational qualifications, etc. 2. Next is the market opportunity- how big is your
See More
Download the medial app to read full posts, comements and news.