undefined | Better HN

0 pointsmason554y ago0 comments

Can’t really say that without a cost breakdown. If the LTV of a customer is greater than the CAC then your losses will grow as you do until you reach a more steady state and reduce your marketing spend.

It takes awhile for a SaaS customer to pass their CAC. But if they do then they should be closer to 80% margin after that.

0 comments

RC_ITR4y ago

Yeah, but burning $183 to add $71 in revenue is a tough pill to swallow.

Sure, it probably will pay back eventually, but as an investor, you really have to be bullish on retention/expansion. to get a reasonable LTV out of that.

Most bulls have been right in the past, but eventually the music stops (look at the tenuous position Slack was in before acquisition).

b9a2cab54y ago

You just need to be confident the LTV estimate is correct. That being said I'm pretty bearish on dev tooling in general as it seems like companies don't want to pay for it (but they will pay for expensive AWS services!)

RC_ITR4y ago

>You just need to be confident the LTV estimate is correct.

I've yet to see an LTV calculation at a VC or from FP&A that is even close to reality (Who cares about WACC, even though the capital we raise is actually very very expensive? Why should we consider Gross Margin? What do you mean we can't just take our best cohort?).

But to mirror the fatalistic tone from my other comment, we're in an easy growth environment, so it kind of doesn't matter (until it does).

PaywallBuster4y ago

or use it's subpar _cloud native_ tools for the "magic integration"

j / k navigate · click thread line to collapse

0 pointsmason554y ago0 comments

It takes awhile for a SaaS customer to pass their CAC. But if they do then they should be closer to 80% margin after that.

0 comments

RC_ITR4y ago

Yeah, but burning $183 to add $71 in revenue is a tough pill to swallow.

Sure, it probably will pay back eventually, but as an investor, you really have to be bullish on retention/expansion. to get a reasonable LTV out of that.

Most bulls have been right in the past, but eventually the music stops (look at the tenuous position Slack was in before acquisition).

b9a2cab54y ago

RC_ITR4y ago

>You just need to be confident the LTV estimate is correct.

But to mirror the fatalistic tone from my other comment, we're in an easy growth environment, so it kind of doesn't matter (until it does).

PaywallBuster4y ago

or use it's subpar _cloud native_ tools for the "magic integration"

j / k navigate · click thread line to collapse