I recently celebrated a friend’s birthday with a large group and discovered that it’s challenging to identify who can’t sing when everyone is singing the same song. Similarly, in B2B SaaS startups, focusing on LTV:CAC ratios can hide weak metrics. While dividing Customer Lifetime Value by Customer Acquisition Cost provides valuable insights, historical retention data accuracy and collection amount are crucial considerations. In a TechCrunch+ column, Igor Shaverskyi, a partner at VC firm Waveup, provides a formula and benchmarks for calculating how long it takes for customer acquisition costs to pay off. Investors now focus on other efficiency metrics to get a more reliable and holistic view of the startup’s capital efficiency. Investors are more interested in reducing CAC Payback and paying special attention to how the Rule of 40 works, which reflects the team’s capability of moving in the right direction. Startups can use data-driven personas to improve customer experience drastically. Impartner VP of product Gary Sabin developed persona-based services to assist the company in identifying actual customers by drawing information from user interactions. After one year, the company reported higher customer satisfaction ratings and NPS scores. While startups frequently emerge from universities and colleges, it may not always be advantageous to have academics in C-suites. During a TechCrunch Early Stage event, SOSV general partner Pae Wu spoke with hardware editor Brian Heater about how partnering with teams that include professors and students can be useful in some sectors, such as traditional biotech and pharma. In contrast, others can be a drag on the company and problematic for the full-time founders. Finally, startups can use social media to project authenticity by testing content in the market and investing more in content that resonates with the target audience.
