1) The document discusses key metrics that matter for startups and businesses, including actionable metrics, customer acquisition cost (CAC), lifetime value (LTV), and cohort analysis.
2) It defines CAC as the cost of acquiring a new customer divided by the number of customers acquired, and notes mistakes like failing to include all acquisition costs.
3) LTV is defined as the predicted net profit from the future relationship with a customer.
4) Cohort analysis breaks users into groups based on acquisition date to analyze engagement over time. This provides insight into how the business and product are evolving.
10. 💎 CAC commons’ mistakes
•Consider the cost per lead and not
cost per acquisition
•Failing to include all the costs
incurred in user acquisition such as
referral fees, credits, or discounts
11. 💎 CAC valuation
•Great Business = CAC Payback < 6 months
•Nice Business = CAC Payback equal to 1 year
•Low Business = CAC Payback > 1 Year
•Unstable business = CAC Payback never
reached
13. LTV is a prediction of the net
profit attributed to the entire
future relationship with a
customer
(Avg Monthly Revenue per Customer *
Contribution Margin per Customer) ÷
Monthly Churn Rate
💎 LTV
17. Is a subset of behavioral
analytics that takes the data from a
given data set (e.g. an e-
commerce platform, web
application, or online game) and
rather than looking at all users as
one unit, it breaks them into related
groups for analysis.
💎 Cohort
18. A good cohort analysis
helps reveal how users
engage with the product
over time
💎 Cohort
20. • Pick the right set of metrics rather than a vanity metric (like app downloads)
• Pick the right period for a cohort — this will be typically be a day, a week, or a month
depending on the business (shorter time periods typically make sense for younger
businesses, and longer ones for more mature businesses)
• Period 1 (day, week, or month) — 100% of install base takes some action that is a
leading indicator for revenue, such as buying a product, listing a product, sharing a
photo, etc.
• Period 2 — calculate the % of install base that is still engaging in that action a week or
month later
• Repeat the analysis for every subsequent cohort to see how behavior has evolved over
the lifetime of each cohort
💎 Cohort
22. If you are developing a new
product or service you
should start with what you
have: research, interviews,
competitive analysis and
assumptions.
💎 Cohort