LTV

“Unless you've been in the business for five years plus, You do not know your LTV. Period.”

“Like at the end of the day, at the end of the day, it's all like a math equation, right? And so like CAC versus LTV and really like you want your cash conversion cycle to be negative. So you're like, all right, how do I spend 20 dollars to sell this book for 2…”

“All the upsells gonna add around 20% to the LTV.”

“So the market in the MENA, you have almost 50% less CPMs, your AOV is much higher, your LTV is much higher.”

“But the reality is it's like false precision. Like you're not going to know where your LTV is if you've been in business for a year or six months or whatever it might be. So I wouldn't over index on that false precision.”

“If you think about standard SaaS metrics like LTV, CAC ARR, whatever, they never mention cash. Like, it's not about cash. It's like more about around accounting and predictability, but we always try to optimize for cash.”

“And a lot of teams get very nervous. Their retention rate went down. Their LTV went down. Oh my goodness. This is going to affect our ability to pay. No, your CAC also went down by probably more. And so now you have the ability to likely spend more. And you ha…”

“The big mistake everyone made in SAS as investors is they calculated infinite LTV. They're like, once we have a customer, they are never going to turn. Right. And therefore like we can pay a lot for them and we'll have them forever.”

“In a lot of ways, I believe LTV and the obsession with marketing metrics like this is what has given the rise to more quantitatively focused growth marketers, a role that has replaced creative, more qualitative marketing manager roles at Silicon Valley startup…”

“Now, LTV does have merit, and it is a helpful proxy to prioritize your marketing and understand the economics of each customer that you acquire, but if relied on entirely, It can be misleading at best and extremely harmful to your business at worst.”

“LTV and calculating LTV is not a business strategy. It is a way of optimizing your marketing channels. And at the end of the day, LTV to CAC, lifetime value to acquisition cost, is simply just an arbitrage game. It is an arbitrage between what you can pay to a…”

“It is no coincidence that companies that put a heavy emphasis on LTV are also the ones that have massive losses as they scale, frequently even through an IPO.”

“Frequently, the same group that is arguing for more spending is the same one that owns the LTV calculation. This is a mistake. Finance should monitor LTV.”

“Companies need a sustainable, competitive advantage that is independent of their variable marketing campaigns. You can't win a fight with a measuring tape.”

“The assumption that we can have eight to nine years as an LTV in the first two years of a company, I get it more if you're Visa, where we've got 50 years of data, but like for a startup, I just think LTV is bullshit. You've got no freaking idea.”

“All the metrics that you're using you know, LTV to CAC CAC return rate, all of them don't take cash into account, okay? It's not cash. It's not cash. ARR is not cash. CAC is not cash. LTV, well, I don't know what it is, but yeah. It's a bogus metric, but, ah, …”

“I think there's too much comfort gained by the, oh, we're only in at 40% LTV. And you're learning that right now in every asset class. Things, even in private markets, can revalue very quickly. So you have to have a lot of conviction around where you are in a …”

“I think the challenge with LTV to CAC, especially for a lot of, even ramp, right? It's only four years old is it's really hard to predict LTV. It's like a DCF. It's extremely assumption laden and it, and it's hard to know. You know, what the defiant value will…”

“I think that there's a lot of opportunity for some type of revenue share for LTV. If you're really able to support a company's LTV and increase that, There should be able to be some point of lift that they're going to lose their LTV numbers if your software go…”

“So typically, as you acquire more and more customers, you're acquiring the marginally good fit customer over time. And your CACs go up, your LTVs go down, it gets harder and harder. Marketplace actually the inverse, like the supply of liquidity is improving, t…”

“Ultimately figuring out that we could increase our LTV from around roughly five, roughly 500 to 2000 total. And that's across the whole customer base.”

“I think all these numbers matter, but they matter at scale. They just don't matter early on.”

“There is a non-zero value for those customers beyond the LTV around what other things that we don't exist yet in the product portfolio that we will be able to sell them once we have them as customers. And I think that makes the math more interesting in terms o…”

“So in my opinion, at least, seed stage is definitely too early to start measuring CAC and LTV, but they're still super important to keep in mind.”

“Aggregate total lifetime, you know, value, you know, lifetime you know, value, you know, calculated obviously gross margin, not top line revenue. So calculated the right way is about 35,000 dollars on average across everyone from our tiniest to our biggest. So…”

“The growth investors, what they do is they talk about CAC and LTV and unit economics. Look, that stuff is super valuable. It's just not valuable in those first 18 to 24 months when the entrepreneur is trying to turn that idea into something real.”

“In general, I would agree with you that both the data around CAC and LTV is far too early at the pre-seed stage. I think until you've started to kind of push more than seven figures of scale between both the CAC and LTV metrics, you really don't know those num…”

“Anywhere between three to 500 dollars. Okay. And so we keep it conservative. We'll typically say 300 dollars.”

“So LTV is five years, about 44,000 dollars.”

“On, on our efforts with ads, it's about 200 dollars CAC on a 600 dollar lifetime value, but it's also really hard to calculate because we haven't been around that long, so lifetime value just goes up as the months go by.”

“And then later, we really got obsessed with cost to acquire a customer, and total lifetime value of customer, and what's the return on that cost to acquire a customer. That's not very helpful in your first year of a startup, though.”

“We usually use the 20 grand LTV for looking at our CAC costs.”

“You know, I think we do that more when we're kind of talking to the board and thinking about, you know outside, you know, investors will look at the LTV component. Candidly, it's not one of the things that we're actually using on kind of the monthly dashboard …”

“Our average LTV is a little north of a thousand dollars.”

“Our LTV has gone down as well because we're bringing on a custom, because we now have a 99 dollar price point and customers who can come in without paying, you know, 250 or 300 dollars out the gate.”

“So I would say the last time we did the model, it was just north of 400,000.”

“We don't at the moment because our churn is so low and it's annualized and they're recurring and it's not a product that tends to leave it. So it said it's a, it would be a bad number for us to be looking at.”

“I don't think about LTV and SAS. I just look at the CAC ratio and then the, and the payback period. Cause I think when you start doing LTV on a half a percent of churn on an early cohort, it's like your LTV is a hundred years or something.”

“11,000 yeah, 11,000 CAC and an LTV of around 62 right now.”

“And those things don't really mean anything at one million of ARR, but it's the practice of starting to measure those things that helps you create the discipline to really understand how to run your business, In a way that will become long-term profitable.”

“Everyone thinks you find a growth channel where the CAC is one third of the LTV, and it's just going to exist forever. The fact of the matter is, they don't. These are all honeypots, and you can milk the honeypot for a while, but eventually competitors move an…”

“Despite large amounts of capital in the system, there does become a point where It becomes reasonably uneconomical for other people to compete from a capital perspective. I don't think that there's ever been a business where the sole defensible point is capita…”

“I think it's like difficult to create high LTV games with that style. Because I think you do want like passionate niche audiences, which can be large, but they want like to sort of gravitate around a sort of certain theme or something like that. If they're goi…”

“The LTV is almost like just a little bit higher than CPI. So like you're not making that much money on each acquisition. So like that's why you sort of need that big scale to like sort of Profit from that launch.”

“Oftentimes investors don't understand when we get to the point where we're talking about our CAC and LTV ratios and things that I share with you. You know, there's strong arguments for investing, but then you've got longer payback periods than maybe an investo…”

“We think people who focus on CAC to LTV is, it can be a vanity metric period because you're not actually focusing on, on gross profit LTV. So actually how much, Profit are you driving the LTV and what is the fully loaded CAC, which means you got to include you…”

“You're much better off Growing a little slower if you're going to actually ensure that you have very high LTV.”

“I think people, the LTV number is not a, I don't think it's a good number to focus on. We calculate it and it's in our metrics and everything, but it's I think, you know, again, you know, you have 95% logo retention or dollar retention. You know, that customer…”

“The engineer's approach to marketing is, like, We're going to hire a marketer, and they're going to find the keywords that are CAC LTV positive. That is, the customer acquisition cost is less than the LTV, and we're going to dump all of our fifty million dolla…”

“I see too many businesses look at averages and averages can either completely turn you upside down or completely leave you under investing. So we never look at the average. We always look at the discreet item markets.”

“When that number one divided by your churn projects like your L, it will project your LTV at like, oh, you're three and a half years or four years. Meanwhile, every year your business changes, your contract values change your contract lengths change, your pro…”

“So our LTV right now is between 758 hundred dollars. You know, cost of customer acquisitions about 85 bucks.”