Every year, the tech ecosystem witnesses once-promising startups go off the rails.
1. Losing money at the corporate level is ok; losing money at the unit level is not. Proper attribution is necessary to tell the difference.
2. It is generally considered uneconomic to spend much more than first year’s revenue on CAC. Another rule of thumb is that LTV (the lifetime value of a customer) should be at least 3X CAC.
3. To avoid a surprise,startups should move away from a “blended CAC” concept as soon as possible and attribute CAC by channel