3 ms·
The tl;dr version is that your company will never get to a size where the executives will suddenly go "oh, well, we're big enough" so you'll always be in that c
by lmartel 13y ago
The tl;dr version is that your company will never get to a size where the executives will suddenly go "oh, well, we're big enough" so you'll always be in that customer acquisition phase, and thus you'll never be profitable.
- crazytony 13y agohuh? If the average customer brings in $500 and the cost to acquire the customer is $200 then you'll be profitable as long as the provisioning* cost is less than $300. *everything else associated with a customer
- InclinedPlane 13y agoIf the cost to acquire a customer is $200 and taken in the first 6 months of finding a customer lead and the average customer brings in $100/year and stays for 5 years and starts becoming a paying customer after an initial 6 month sales period then you will not be profitable easily as long as you continue growing. It'll take 30 full months to amortize the net cost of acquiring a customer down to 0. That's a long time. Also, if your growth accelerates you'll just keep digging deeper and deeper into a hole.