3 ms·

Yes and seeing the loss grow like that yearly is not a good look. Otherwise the product is really good.

• mason55 5y ago
  Can’t really say that without a cost breakdown. If the LTV of a customer is greater than the CAC then your losses will grow as you do until you reach a more steady state and reduce your marketing spend. It takes awhile for a SaaS customer to pass their CAC. But if they do then they should be closer to 80% margin after that.
  • RC_ITR 5y ago
    Yeah, but burning $183 to add $71 in revenue is a tough pill to swallow. Sure, it probably will pay back eventually, but as an investor, you really have to be bullish on retention/expansion. to get a reasonable LTV out of that. Most bulls have been right in the past, but eventually the music stops (look at the tenuous position Slack was in before acquisition).
    • b9a2cab5 5y ago
      You just need to be confident the LTV estimate is correct. That being said I'm pretty bearish on dev tooling in general as it seems like companies don't want to pay for it (but they will pay for expensive AWS services!)
      • PaywallBuster 5y ago
        or use it's subpar _cloud native_ tools for the "magic integration"
      • RC_ITR 5y ago
        >You just need to be confident the LTV estimate is correct. I've yet to see an LTV calculation at a VC or from FP&A that is even close to reality (Who cares about WACC, even though the capital we raise is actually very very expensive? Why should we consider Gross Margin? What do you mean we can't just take our best cohort?). But to mirror the fatalistic tone from my other comment, we're in an easy growth environment, so it kind of doesn't matter (until it does).