Tag Archives: CAC Payback Period

You Can’t Fix a CAC Payback Period: The Operator vs. Investor View of SaaS Metrics

Just a quick post to share the slides for the presention I gave today at SaaS Metrics Palooza, entitled You Can’t Fix a CAC Payback Period: The Operator vs. Investor View of SaaS Metrics.  (For those with Slideshare issues, Google Drive share is here.)

The presentation discusses:

  • The ways VCs can use metrics in discussions with founders and CEOs.
  • A deep dive into CAC payback period (CPP) itself, how it’s defined, what it measures, and how its often “corrected.”
  • How investors like compound metrics (e.g., CPP, Rule of 40) whereas operators are best focused on atomic metrics — e.g., you should set accountability and OKRs around atomic metrics.
  • How some metrics are stealthly more compound that you might think — e.g., CAC based on net-new ARR or gross profit (or both).
  • Why I like to say, “you can’t fix a CAC payback period.”  It’s a compound metric which can be driven by at least 5 different factors.
  • How to apply my observations to everyday SaaS life.

The slides are below.  Thanks to Ray Rike for inviting me to the palooza!