Payback Period

“The payback on these AI data centers is normally two to three years. Now, Elon has massively outperformed that with his storage deal with Anthropic where he's getting all his money back if the deal lasts a year and a bit. But normally the payback is not, it's …”

“We set different payback periods depending on which product line and how aggressive we want to be, but these vary between, say, 12 months to 24, maybe even 36 months for that payback period.”

“Also, if you think about payback period, if you look at top quartile SaaS companies versus bottom quartile, top quartile have three X shorter payback period than the bottom quartile and seven X higher valuation.”

“We've seen payback here has increased about 12% on average. This is basically linear. It's in line with the increase in sales cycles.”

“So if someone pays us 10,000 dollars a year, And it costs us 10,000 dollars to acquire them. We get paid back in 12 months, right? Anything above that, you start to question whether your economics work, anything below that, it's really good.”

“The better method, which I was kind of getting at was payback period, which removes the notion of lifetime, but also it could be calculated on a more granular level.”

“Thinking about something like payback period is a much better measure of paid marketing performance than LTV to CAC because the speed at which you get enough money back to then go acquire another customer has much more bearing on how fast your business can gro…”

“You can have super healthy CAC to LTV ratios, but if your payback period is really long, you get stuck in a cash gap and it kills the business.”

“Our payback period is typically within six to nine months to get a new customer.”

“But some businesses obviously have really long three or four years, which is kind of a little bit insane. It's very hard to predict how things are going to be that long”

“Typically the payback is for the small customers is actually six or seven months, and for the bigger customers is 12 to 14.”

“Our payback period is, you know, called four months today”

“Eight months.”

“Well right now it's 14 months. You know, a pro forma over the next five years, you know, as we bring investment in, we're going to invest in the growth curve. The payback will change based on Different points in our customer, customer or our country, a company…”

“The reason why your payback period grows as you spend more is essentially that you're exhausting the most relevant people or customers for your business... And benchmarks we've heard thrown around are roughly doubling every five million in spend.”

“We like to get below 12 months revenue payback period.”

“I like to be paid back in three to six months.”

“So if you look at our newer subscriptions, the new clients we sign on right now, our pay book would be around like Four to six months.”

“And I actually look at payback period, both on a revenue basis and a cash basis which are, you know, if you have, You know, any kind of payment term variance can be very different.”

“One to two years is fine because of the stickiness and the, how long people are on a payroll product. Nobody who goes through a payroll implementation wants to do it again anytime soon if they can help it.”

“Oh my gosh, less than a quarter.”

“What I think about, and what a lot of the SaaS the SaaS investors and, you know, the kind of people who are thinking really well about economics are thinking about payback period, right? Because that's the kind of speed limit on how fast you can grow and like …”

“Well, if you look at like what the market considers a red flag, I think if you talk to the venture community and the guys who really know this stuff, you know, they're going to flag a payback period. That's like greater than two years as, you know, probably a …”

“Like right now, you know, trying to get it between a year and a year and a half is where I feel comfortable with the business.”