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>> wonder if they're just spending $.99 of every $1 If they spend $0.99 for $1 of MRR, that is amazing, because the first month's revenue covers the cost of ac
by TuringNYC 4y ago
>> wonder if they're just spending $.99 of every $1
If they spend $0.99 for $1 of MRR, that is amazing, because the first month's revenue covers the cost of acquisition and the rest of the stream is profit (minus other expenses of course.)
Some of it depends on churn and how much MRR you lose and how quickly.
- tppiotrowski 4y agoSo it's a metric you can game if you go viral on Twitter and get a lot of signups that cancel after one month?
- TuringNYC 4y agoNot really, because MRR isnt the only metric. We'd look at an objective function of LTV to CAC ratio. We'd ignore everything below a certain absolute MRR. We'd also ignore anything below a certain MRR growth rate. The ones we'd typically look at as an investor are: MRR/ARR, Churn, CAC and TLV. TLV would be total lifetime value which includes the monthly revenue * months given churn. CAC would be the advertisement cost. This basically means, how much $ are you spending to make what total $ per customer, and how what is the volume.