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Money, pricing & model

Unit economics & modeling

Know what a customer costs and earns.

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How do I calculate CAC (customer acquisition cost) and LTV? CAC = total sales and marketing spend divided by new customers acquired in that period, count everything, not just ad spend. LTV = the profit (not ... Intermediate 3 resources → What is a good LTV to CAC ratio? The rule of thumb is LTV:CAC of at least 3:1, earn back roughly three times what it costs to acquire a customer. Below 1:1 you lose money on every ... Intermediate 3 resources → What metrics should I actually track as an early-stage SaaS founder? Early on, obsess over MRR growth, churn, gross margin, and CAC payback, ignore vanity metrics like downloads and pageviews. Net revenue retention t... Intermediate 3 resources → How do I build a simple financial model or revenue projection? Build bottom-up from real drivers, leads, conversion rate, price, churn, not top-down from 'we'll grab 1% of a huge market.' A useful early model f... Intermediate 3 resources → What is churn and how much churn is too much? Churn is the rate customers leave, and it silently caps your growth because you're refilling a leaky bucket. For SMB SaaS, ~3-5% monthly is common ... Intermediate 2 resources → My CAC looks great but I paid for it with a founder-led discount. How do I know my unit economics without the promo? Discounts and founder hustle hide your real acquisition cost, so run two versions: the promo number and the number when a stranger buys at list pri... Intermediate 2 resources → I sell a one-time product, not a subscription. Do unit economics and LTV even apply to me? They absolutely apply, but LTV comes from repeat purchases and referrals rather than a subscription, so your key questions become purchase frequenc... Intermediate 2 resources → What are the most common mistakes founders make when they build their first unit economics model? The classic traps are using blended CAC to hide bad paid channels, ignoring the cost to serve and support, assuming churn stays flat forever, and t... Intermediate 2 resources → How should I think about pricing so my unit economics actually work, instead of guessing a number and hoping? Price off the value you create and the economics you need, not off your costs or a competitor's list price, and then check that the resulting contr... Intermediate 3 resources → My unit economics work on a spreadsheet but I'm bleeding cash every month. Why the disconnect and what do I fix first? Positive unit economics per customer can still coexist with a cash crunch because fixed costs (salaries, tools, rent) and the timing gap between sp... Intermediate 3 resources →

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