Finance·4 / 5
Unit economics 101
~5 min read
Two numbers tell you if a business will survive:
- CAC: customer acquisition cost - what it costs to get one new customer.
- LTV: lifetime value - total margin one customer generates over time.
Healthy SaaS: LTV / CAC ≥ 3. If acquiring a customer costs more than they will ever pay you, you do not have a business yet.