Questions? Let me know in the comments happy to discuss. 💡 Also, if you want to learn which finance frameworks the top 1% of founders use to scale their startups to massive outcomes, check out my free webinar ⇒ www.ericandrewsstartups.com/financeforstartups
Hey Eric. On the 'seller CAC (per buyer)' calculation, I grasp that the 459 CAC is for all 85 sellers combined: I need you to please breakdown how you get to individual figures (seller CAC per buyer); what figures did you calculate in order to get to '32'?
Yes, I can help. So let's just zoom out for a second. So for every transaction, you need a buyer and a seller, and the acquisition costs associated with both of them. So for a seller, we are saying that over their typical lifetime they sell 85 orders each. However on the buyer side, the typical buyer only buys 6 orders over their lifetime. So for one seller to sell 85 orders, you will need to acquire 85/6 = 14.1 buyers to buy those 85 orders. So s *ell* er CAC is the CAC to acquire one single seller $459 + 14.1 * the CAC to acquire each of those buyers (14.1 x $31 = $436). Now if we instead try to think about the business CAC from the buyer perspective, each buyer only buys 6 orders. So you actually only need one seller selling 85 orders for every 14.1 buyers. So the seller CAC from the buyer perspective is only a tiny fraction of the 85 orders, it is the acquisition of one seller spread over 14.1 buyers. So it is the inverse of 14.1 buyers per seller, it is 1/14 = 0.07 sellers needed per buyer. So 0.07 * $459 gets you to the $32 you asked about.
Questions? Let me know in the comments happy to discuss.
💡 Also, if you want to learn which finance frameworks the top 1% of founders use to scale their startups to massive outcomes, check out my free webinar ⇒ www.ericandrewsstartups.com/financeforstartups
Super
Do you plan on running cohort6 anytime soon? Looks great. Thanks
Yes! Launching in about a month. If you're on the waitlist I will send out an email
@@eric_andrews perfect. I am already on the waitlist.
@@ksoonsoon awesome I'll see you there!
Hey Eric.
On the 'seller CAC (per buyer)' calculation, I grasp that the 459 CAC is for all 85 sellers combined:
I need you to please breakdown how you get to individual figures (seller CAC per buyer); what figures did you calculate in order to get to '32'?
Yes, I can help. So let's just zoom out for a second.
So for every transaction, you need a buyer and a seller, and the acquisition costs associated with both of them. So for a seller, we are saying that over their typical lifetime they sell 85 orders each. However on the buyer side, the typical buyer only buys 6 orders over their lifetime. So for one seller to sell 85 orders, you will need to acquire 85/6 = 14.1 buyers to buy those 85 orders. So s *ell* er CAC is the CAC to acquire one single seller $459 + 14.1 * the CAC to acquire each of those buyers (14.1 x $31 = $436).
Now if we instead try to think about the business CAC from the buyer perspective, each buyer only buys 6 orders. So you actually only need one seller selling 85 orders for every 14.1 buyers. So the seller CAC from the buyer perspective is only a tiny fraction of the 85 orders, it is the acquisition of one seller spread over 14.1 buyers. So it is the inverse of 14.1 buyers per seller, it is 1/14 = 0.07 sellers needed per buyer. So 0.07 * $459 gets you to the $32 you asked about.
@@eric_andrews Got it.
you're the man ...