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For Entrepreneurs

3 resources from For Entrepreneurs we point founders to, and the questions each answers.

✍️ Essay
✓ Link checked Free Intermediate

Why we picked it This is the piece nearly every other CAC explainer is quoting from, so go to the source. Skok walks through how CAC, lifetime value, and the payback period actually relate, and gives you concrete targets (aim for LTV at least 3x CAC, and try to recover CAC within 5 to 12 months) so you can set a number before you have any real data. It is dense, but it is the honest founder-level breakdown, not a hype piece.

SaaS Metrics 2.0: A Guide to Measuring and Improving What Matters

From For Entrepreneurs by David Skok

  • Your target is a ratio, not a single figure: lifetime value should be roughly 3x or more of what it costs to acquire a customer.
  • Watch the payback period separately from the ratio: recovering CAC in under a year keeps you from bleeding cash while you grow.
  • Before a single sale you can back into a target CAC from your expected margin and how long a customer is likely to stay.
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Answers How do I calculate my target CAC before I've made a single sale? My CAC looks great but I paid for it with a founder-led discount. How do I know my unit economics without the promo? Do I need to understand accrual accounting and things like deferred revenue, or is cash-basis enough for a SaaS just starting out?
✍️ Essay
✓ Link checked Free Intermediate

Why we picked it This is the piece nearly every later explainer is quoting from, so start at the source. Skok lays out the actual math (K = invites times conversion rate) and then makes the counterintuitive point that cycle time, how fast the loop repeats, matters more than the coefficient itself. If you only read one thing to understand what a viral coefficient really is, read this.

Lessons Learned: Viral Marketing

From For Entrepreneurs by David Skok ~15 min read

  • The viral coefficient K is just invites sent per user multiplied by the percentage who convert, and you need K above 1 for true self-sustaining viral growth.
  • Cycle time is the hidden lever: because K compounds over t/ct, halving how long the loop takes can matter far more than nudging the coefficient up.
  • Most products will not hit K above 1, and that is fine, the essay reframes the goal as speeding up and amplifying whatever loop you have.
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Answers What's a viral coefficient, and is chasing a k-factor above 1 realistic for my kind of product?
✍️ Essay
✓ Link checked Free Beginner

Why we picked it This is the piece almost every other CAC and LTV explainer quietly borrows from, and it is still the clearest place to actually learn the ideas. Skok walks a first time founder through what it costs to win a customer, what that customer is worth over time, and why the gap between the two quietly kills companies. It is a starting point for building your own numbers, not a formula to memorize.

Startup Killer: the Cost of Customer Acquisition

From For Entrepreneurs by David Skok about 20 minute read

  • CAC is your full sales and marketing spend over a period divided by the customers you won in it, so it is easy to under count if you forget salaries.
  • LTV is the gross margin you expect from a customer over the whole relationship, not their first payment, and a rough LTV to CAC of about 3 to 1 is the sanity check.
  • Aim to earn your CAC back in under 12 months, because a longer payback means you need a lot more cash just to grow.
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Answers How do I figure out my unit economics before I have real customers?