S4E10: Startup Financials - LTV and CAC in B2B SaaS - Valley Nordic

Episode Transcript
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Chander Chawla (00:04):
Chand back. This is Chander in Palo Alto,

Arne Tonning (00:08):
and this is Arne in Oslo.

We are very glad to be back after, I think,
almost six weeks of holiday toaccommodate RNAs vacation
schedule,

absolutely it's maybe even longer. You know, I'm
a European, so I take myvacations very seriously

and the European lifestyle. And the funny thing
is, we had planned to recordthis episode where RNA was
visiting Palo Alto almost amonth ago, and he did visit, and
he did bring me an echo eat, andwe just started talking, and we

(00:55):
forgot to press the recordbutton. So said, Okay, we'll do
it another day, but that didn'twork out. So here we are back to
recording on Zoom remote. ButI'm glad I was able to just talk
to him and see him in person anddrink Aqua wheat and beer with

(01:16):
him.

So very professional in other words, and
at least fun.

Yeah, I think our listeners know how
professional we are. It's casualconversation with all we may
have new listeners. So welcomenew listeners and all listeners.
Valley Nordic, our podcast isabout conversation, casual
conversations, between Arne,who's a venture capitalist in

(01:44):
Oslo, and me, who is anentrepreneur in Silicon Valley.
So you will see how we thinkabout the world differently. I
am. I don't see the world inboxes. Arne sees the world in
boxes. So today, after oursummer break, we're going to get

(02:05):
into RNA box, and that's B to B.
SaaS. The topic will broad.
Topic we'll discuss today isstartup financials, but then
we'll narrow it down and focuson B to be SaaS financials. How
does that sound good? Okay, somaybe let's start with, you

(02:29):
know, financials, like it's asyou know, I talk to a lot of
startups. You who you know,that's your job to talk to a lot
of startups. Most of them arefounded by engineers, especially
in the Nordic countries, andthey don't have as much
financial literacy they learn onthe job or start doing it. But

(02:54):
the basic you know idea that thefinance, at least the public
finance world expects you tohave three financial reports,
income statement, that's aboutprofitability, cash flow
statement, that's about how muchcash is going in and out of the

(03:18):
business. And third is balancesheet. That's basically
accounting, but how much assetsyou have, and assets equal
liability plus equity. So they Isee the public companies manage
mainly for the income statement,most of them, I think the

(03:40):
activist investors have broughtattention to the balance sheet.
What are you doing with thecash? Why don't you give back to
shareholders, etc? And I'd seeAmazon is probably one of the
few companies that had beenmanaging for cash flow so that,

(04:01):
like we are, you know, you areventure capitalist, so you know
all this inherently. And I'm inbusiness, and I run businesses,
so I understand this. How, howprevalent is that understanding
our like in the talks you havethe startup founders, like, what
percentage of people understandthis like you manage business

(04:23):
differently if you're managingfor income statement and versus
you're managing for cash flow?

I think it varies a lot. But I think, like most
startup founders, are not, asyou say, financial people, and
they don't focus on these thingsa whole lot. A lot of you know
about developing technology,about building product and about
getting customers, which I thinkyou know is, is fundamentals of

(04:55):
the really fundamentals, Ithink, like if you if you are.
Focus on sort of the nittygritty and sort of tailor your
financial statements more thandriving your fundamental
business, you're probably wrong.
That said, like understandingthe financials and like, what

(05:15):
are the main levers and what tolook at, they can be very useful
in sort of guiding you inbuilding your business. So, so I
think they're more sort ofhelpful around the fundamentals
of the business, and, and someare more experienced about that,

(05:35):
and and sort of manage the rightthings about them.

Yeah. So you're all three of them are backward
looking. You look how you did inthe past. I mean, in the US,
it's, you know, every 90 days,if you're a public company, as
you produce these threestatements, but their reports,
they don't tell you what thebusiness drivers are. So you
bring up a very good point. As afounder, you have to focus on

(06:04):
what is driving the business. Sothat's forward looking. How can
I make something happen like,maybe I reduce CAC, you know,
maybe I increase the MPs,whatever that is what drives the
business. What are the forwardlooking things? And all these
three statements are backwardlooking.

That's That's true. But I think like in terms
of managing your company, youwant to have a dashboard of of
metrics, and some of them arelead indicators, maybe like
leads generated or somethingthat doesn't generate anything
directly in your financialstatements, but you also want to
have some parameters that areeither directly related or can

(06:52):
actually be found in the periodof periodical statements. So So
let's take an example. I youknow, when I look at these
statements. There are specificthings I zoom into for each of
them, and they are typicallyalso the things that you find on
the dashboard for the managementto drive the company. So let's

(07:15):
take an example, your burn rate,which is a super important is
also, you would also find thatin the cash flow statement,
right and how much money youhave left in the bank, which is

(07:35):
essentially, you know, yourrunway is essentially how much
money You burn and how much cashyou have left. And these are
like absolutely key parametersto understand what room you have
to maneuver. And so the burnrate you would find in the cash
flow statement and your cashbalance, you would find the

(07:56):
balance statement, right? Sothese are, like absolutely
critical factors that are bothin your dashboard but also in
your financial statements.

Yeah, yeah.

These are examples, right? Yeah.

So we let me, like people who don't know what
burn rate is. It's, you know it,I think it's a good term the
venture industry came up with.
Literally, it means how muchcash you're burning. What that
means is you look at the cashcoming in from all operations,

(08:32):
or however, from and then cashgoing out, and what is the after
you have, like, if you take allthe cash in a month, and
generally, it's a monthlymetric, so how much cash, how
much money you have spent orburned, deducting the cash

(08:55):
Coming in,

that's burned, right? Yeah. And you can even
say, oftentimes you talk aboutboth net burn and gross burn and
not burning.

That's interesting. Like I always see
just, you know, burn, which isokay, the cash coming in, and
then you know how much cash youspend.

Yeah. But, you know, some, I mean, if you're a
mature company, you know, thethe money that comes in is, you
know, statistically, fairlypredictable. If an early stage
company, you know, it might bethat you have a contract this
month, and the next contractcomes, or the payment for next

(09:45):
contract, maybe is in fivemonths, or something like that.
And the income flows might notbe predictable in a statistical
way, whereas your cost base is.
Yeah, to large extent, right? Sothe gross burn is essentially
the same as your cash cost base,and the net burn is when you

(10:10):
account for the money coming infrom customers or other soft
funding or anything else that'snot, like, directly customer
payments.

So in your world, gross burn would be,
let's say, in operations we arespending, like, sales,
marketing, salaries, everything,yeah, spending million dollars a
month. Yeah, that would grossburn. And if, let's say off that
million dollar we are spendingthe early stage. We're getting
half a million in revenue orcash. Sorry, not revenue cash

(10:47):
coming in, yeah. So that wouldbe million minus half a million.
So half a million would be netburn.

Exactly, exactly.
So, so the growth burn is yourworst case burn, right? We have
no income, yeah, or cash fromfrom income or any other source,

yeah? So it's kind of like a simpler version
of, you know, let's say BalanceSheet and Cash Flow Statement
combined, yeah, yeah, it's

essentially, essentially the key, key
parameters taken out of of thosefinancial statements.

Yeah, one of the things I learned, you know,
later in life is profit is anopinion, like you would think,
if you put a number tosomething, that's fact. No, it's
not. Profit is an opinion.
That's why I have become morealigned to managing a business
based on cash, not on profit.

(11:57):
But I think that deserves aseparate episode. But today, I
want to get more into your boxof B to B SaaS. So given all
this burn and gross and net burnand income statement, balance
sheet and cash flow statement inthe B to B SaaS world, like,

(12:19):
what do you look for when you'relooking to invest that is series
A or Series B. Well, let's takethem on that one. If you want to
make a series a investment in acompany, what do you look for in
terms of numbers like growthrate and the burn rate, sales

(12:40):
and marketing expense aspercentage of revenue. I don't
know whatever that is, so tellus. What do you look for when
you invest in A, B to B? SAScompany for Series A?

Yes. So I think, like there are, like a couple of
top level qualifiers, whetherthis is a series a company in
the first place, one is sort ofthe revenue, run rate. I mean
everything I say, there areexceptions to right. There are
exceptional companies that maybehave, like, a huge potential,

(13:19):
but they're not at a normalseries, a revenue maturity, for
example. So they're sort of all,all exceptions. But I think, I
think, like the first framing,whether it's like a normal
series, a company is one thingis like, what's the revenue run
rate, or, or as a SaaS company,revenue is oftentimes accounted

(13:43):
for us annual recurring revenue,or monthly recurring revenue,
which is like the core revenueof a SaaS company. I mean, if
you take revenue overall, itmight be that you have
consulting income orinstallation fees or sort of
like from a SaaS perspective,impure revenue streams. So you

(14:04):
tend to drill

on it, impure,

no, I mean, this is something I made up now or
but ultimately, a software as aservice company lives on the
subscriptions, right? Therecurring revenues from
subscriptions. As you tend tozoom in on that, which is like
the core metric of a SaaScompany. And some SaaS companies
might have other revenue streamsas well. So we kind of zoom

(14:31):
into, like the revenue part.
That's actually the corebusiness, which is the
subscriptions. And that part ofthe revenue is called Arr, MRR,
depending on how thesubscription structure is put
up, but it is, like the mainrevenue, right? You look at, is
it, is it, you know, matureenough for an a company. And I'd
say, like, this is sort of theRule of. Thumb that existed for

(14:59):
10 years, right? That a milliondollars of annual recurring
revenue, that's, that's theseries a company so like that,
sort of the general level ofsubscription or recurring
revenue is kind of like a ruleof thumb you look at immediately
the second,

when you say, is it mature enough to be series A
you mean, do they have milliondollars in ARR which stands for
annual reoccurring revenue

exactly and and, like you know, there are times
where companies raise at half amillion, or there are times when
they race at two, 2 million. SoI'm not saying a million
dollars. A million dollars is arule of thumb, not a, you know,
some sort of, you know, specificthreshold,

if you like, yeah.

And the other is the growth rate, right? The
expectation of of growth ratefor venture back people, company
is like, you have to be 3x yearover year growth as you pass a
million dollars. This is alsorule of thumb, right? So I think
these are sort of like rule ofthumb framings. Is this a series

(16:18):
a company?

Yes, but when you said 3x year of your growth
expected, when you invest, howlong do you invest? It like
expected for or next threeyears, five years like when?
What is the time frame for 3xyear over year growth?

Well, you know, the back of the envelope formula
for building a venture backablecompany is fight your way to a
million dollars of ARR but youhave to have some sort of
velocity as you pass a milliondollars. And your expectation is
that you triple in the firstyear after that, and the triple
in the second year after that,and then you go to a doubling

(17:02):
for a few years, two to threeyears. That's like, that's like
the slam dunk formula, if youlike. There are great companies
that don't hit that.
Essentially, if you hit that,you're a unicorn in five years,
and nobody dies. If you'reunicorn in six or seven years,
to be honest, that's also as asuccess, but, but, but, like, if

you go by the rule of thumb, that's what you
aim for, right? Get to a milliondollars with velocity, and then
triple triple, and then threetimes double. Okay, so wait, let
me, like, get put numbers tothat. So let's say I have a
company, RNA and chanderbsas.com and we achieve million

(17:47):
dollar revenue in 2022 so youinvest so you would want us to
be 3 million company in 2023 andthen 9 million company in 2024,
and then 18 million company in2025, 32 million in 2026, and

36 if you're 36

Yeah, I Yes. I think it's showing up. I Arne
brought me Aqua weed when hecame, and I came to the office
today to record this podcast. Isaid, Oh, I'm talking to Arne.
Let me have some echo eat. Soit's showing in like my you
know, math 18 times two is 36not 32 but that you get the

(18:41):
idea, yeah, like that what youwould want, like, 3x 3x 2x 2x 2x
right? It's all made up. Like,you don't really know. How do
you know it's going to actuallyhappen?

Well, I mean, the only thing you know is that
that's not exactly going tohappen. That's for sure. Then,
again, there are companies thatgo 4x or 5x and then the next
year, it's so even in a verysuccessful scenario, it does not

(19:19):
follow that particular path,because there tend to be
plateaus, and you know, you haveto fight, you know, to go from
this stage to that stage, youhave to implement a different
management structure, or youhave to find a different
channel, or or something. Youknow that this, it's not going
to be like a machine that ticks,because a lot of things have to
happen from a company to gofrom, you know, for argument's

(19:42):
sake, $1 million they are, to 72Yeah. So, so it's, it's sort of
a little bit more sort ofaccelerate stop, accelerate stop
kind of thing, even through thispattern, yeah. Yeah.

So you know, because it's a rule of thumb,
that means all founders knowthat, or not all, but let's say
most of them know that. Yeah, ofcourse, you're going to show you
a projection that shows youthat. Well, what do you double
click on? Get deeper into ifOkay, is to increase your

(20:21):
confidence that these people orthis company can actually
achieve that. And I think youdon't know, as you said, but how
do you increase your confidence?
What do you look at beyond justthe projections?

Yeah, I mean, so this, I mean, it's a multitude
of things, and some of them aresort of metrics oriented. Some
of them are more sort of lookingat, you know, potential of it,
and how the organization isstructured, and sort of, you
know, more or less quantifiablethings. But I should also

(21:04):
mention this another sort ofqualifying factor here. It's
generally something that's ahygienic that you want to want
to check it right, and that isthat to be a very valuable
company, you have to have a veryhigh gross margin. Most SaaS
companies do have a very highgross margin, you know, 70 to

(21:28):
90% or something like that. But,but that's it's. There are
examples where, where justdeploying this is very costly
because it might be verycomputational intensive, or
something like that, that that,or it's very costly to implement

(21:50):
new customers, or because it'smanual, or something that might
be able to, you know, you mightbe able to grow after that by
automating or something, but youWant to check whether you know.
The general assumption is thatsoftware as a service is already
high gross margin. But if it'snot, you won't understand why.

(22:12):
But in most of the cases forsoftware as a service, it is
very high gross margin. So thatwas, that was a sidetrack, but
it's important anyway.

No, no, that's good sidetrack. So let's get
deeper into that. So grossmargin for people new to finance
is basically what somebody'spaying you. That's revenue minus
the cost of producing the goodor service that people are

(22:45):
buying. So in the hardwareworld, that would be cogs, cost
of goods sold. And I think it'salso sometimes used in SaaS, but
sometimes it's called cost ofrevenue. So in the SaaS world,
you know, it's basically up tome. Let's say I'm running the
company like, what do Iassociate with cogs? What

(23:07):
developer time is going towardscost of revenue, and what goes
towards R and D, and what goestowards is, basically I am
deciding that I can make it highgross margin. Do you get into
that level of detail? Or how doyou figure out if the gross
margin, what you're seeing, isthe actual gross margin?

Well, that goes towards, you know, understanding
your cost structure, right? AndI think anything that's truly
variable per customer should gointo your gross margin. So if
it's sort of more so, that meansvariable cost in nature, and

(23:53):
variable meaning it scales withwith customers that goes into
gross margin, but like so r, ddoesn't scale. You know, if you
develop code and you deploy it,it doesn't increase cost per
number of of customers you have.
But if you have, like, you know,storage and traffic on AWS, that
scales per customer, typically,because it's dependent on the

(24:19):
usage of a customer, or if it's,let's say, commission to a
partner for distribution that'salso paid per customer. So these
sort of variable or or likeevery customer typically spends
two hours to support calls everymonth, on average, with you

(24:42):
know, your support organization,these things are linear variable
costs with the number ofcustomers, and that goes into
your gross margin. And support

calls are not in gross margin.

Yeah. Well, depends on how you package it, I
would, I would actually say itis,

but that's after the customer has bought it. Yes,
so that, I wouldn't put thatthat's not cost of revenue.
That's the support cost, right?
Like it's so you know that'smore OPEX or the I don't know
where you in the incomestatement. I wouldn't put that

(25:26):
in cogs, the support cost ofafter customer has bought the
product. That's where that wouldgo. It's in OpEx. That's
operational

expense, no, if it's in my mind, but, but the
same thing, if you know the theAWS storage and traffic
associated with the customeronly happens after the customer
have bought it. So I think anyvariable cost should go into
your gross margin calculation.

Okay, I see what you're saying, because you see
that they're paying you, let'ssay monthly. And for them to pay
you monthly, you need to haveAWS. You need to have whatever
infrastructure cost and supportcost as part of that. Yeah, so

I in the cost, the cost part of the gross margin. I
would bundle anything that'svariable and linear with the
customer. And you can labelthose costs various things, if
you want to. It could be supportcosts, and it could be hosting
cost, and it could becommissions, and it could be

(26:53):
whatever, but anything that'slinearly variable I would deduct
to get the gross margin. Okay,

I see, so you like, you see people doing that.
They're putting support cards incogs. Like, do startups actually
do that? Well,

whether you call it cogs, or you call it
something else, but I would, Iwould, I would definitely call
it into, you know, the grossmargin calculation that said, I
think there are a lot oftrickery in this space, in
assuming, for

example, yes, well,

well, you think that, you Know, an argument
would be, well, you know, wehave three people in support.
That's an overhead. We just haveto have them right. And as they
take support calls, we'll learnmore. And it's not a variable,
linear cost, because, you know,when they take support costs,
will, you know, update FAQs andthe support pages and whatnot,

(28:02):
and it will not, you know, newcustomers will not generate the
same number of support calls.
For example, that would be anargument to make this an
overhead rather than a you know.
And you know, sometimes thatargument sticks and sometimes it
doesn't. Yeah,

it's so when RNA says overhead, I say GNA. So we
are saying the same thing forpeople who are not financially,
you know, tuned,

yeah, yeah, whether it's GNA or whether it's
something else, but, it's GNA isdefinitely an overhead, whether
support is

we when you say overhead, I say GNA, but I think
our intent is the same,

yeah, but overhead in my mind, you know, in my
mind, GNA is general andadministration. So that's
management and administration,right? Whereas there are there
are

in

it depends on how you look at R and D, for
example, because R and D is alsoan overhead, even if it's a very
value, creating overhead but,but it's not cost that linearly,
scales with deployment, with thenumber of customers. So there's

(29:35):
a scale benefit to

rd. You can argue that, like management
scales with number of customers,so, but

not linearly.
Yeah, right, and, nor does R andD, right? Does you have more
customers? Maybe they want morefeatures. You have to do more in
R D, but those features can bedeployed to rest of the customer
base as well, right? So, so, ofcourse. Like a HP has a larger
GNA than a startup of threepeople, but it does. It's a

(30:06):
nonlinear scaling. Of course.

It depends how we define linear. You can say,
okay, for every 100 people,every 100 customers, I need a
new manager so you can, okay,that's linear. You know, you can
predict every 100 is one, but isit? You know,

in theory, a large a large companies should have
economies of scale in that theadministration is spread over
more customers, and so is r, d,and so are other overheads. In
my mind, yeah,

by the way, it doesn't sound good, but I think
I've been an overhead most of mylife. Management is always
overhead,

yeah, but you've been in marketing, for example,
and marketing, in my mind, isdefinitely not an overhead, but
it's also not a cost of servingcustomer, but it's a cost of
acquiring a customer,

right for it's brand marketing, it's not cost
of acquiring customer. If youcan relate to acquiring
customer, then it's cost ofacquiring customer, but
management of all the functions,it's, again, gray area. Do you
call it overhead? Or it's partof tech, yeah, I'm mixing

(31:47):
things. I think the this CAC,LTE, is like a more B to B, SAS
thing in the old world, it'smore, you know, as it used to
be, s, DNA, sales, general andadministrative expenses. But
then it became GNA. We startedseparating, separating sales and

(32:08):
marketing. And if I remembercorrectly, all like these
changes were started withSalesforce. When they became
big, they were kind of the firstSaaS company that became big.
Their logo used to be nosoftware. Basically, you don't
have to buy software and how itevolved from that. But for the

(32:34):
listener, you see how you knowRNA has been doing it for 20
years, and on the VC side, orcapital side. I'm doing it for
20 years, on business side, andyou see how much debate there
is, or it's all it's verycontextual, even we are talking

(32:56):
about numbers, it's not asfactual. There's lot of opinions
involved in what goes where.
Okay, that it may be anothersidebar. Where would you put
product people? Are they part ofcards, or are they part of GNA?

No, they're part of r&d.

Why is that?
Because you have to build theproduct

to sell it exactly,

so you're constantly

but it does not enter into the cost side of the
gross margin. In my mind, I 100.

And where would you put the software development
people? Are they in cogs? Arethere all are r&d. They're all
r&d. Okay. What was in cogs inyour world, the variable cost,
yes, the infrastructure cost andsupport cost. But are there any

(34:03):
like salaried people going tocogs

in in the event that support cost is linearly
variable with the customer, thesupport people go in there, in
my mind.

Okay, so let's say support people and
infrastructure cost. That's it.
That's cogs. Well,

yeah, but it depends on how you define
infrastructure as well. So say,I mean for a pure place,
software as a service. Software

service, so everything's happening in the
cloud, yeah, but

there are a lot of things that are, you know, being
packaged as a software as aservice, like thing that might
have other components to it. Soand So you try to, like, analyze
it, kind of like a software. Itis, but it might be that there's
also a like, say, an IoT serviceyou have, maybe, you know, some

(35:10):
sort of connectivity to it, inaddition to that, like a cell
phone subscription or somethingthat is also variable with the
number of devices. Or it couldbe that you have to have a
device to have the subscriptionof the software, and there's a
hardware that you have to ship,and you have to amortize over

(35:34):
the lifetime, or a subset of thelifetime of the subscription. So
there could be other elementsthat are directly related to how
many customers or subscriptionsyou have, even if I agree, if
you have a SIM card or ahardware device, it's not no
longer a pure play software as aservice company. There are

(35:55):
companies that are similar inmany ways, and you look at them
in a similar lens, and then youmight bump a lot of things into
it.

So let's say for us, like a company that's
selling IoT and they're let'ssay you're paying, I am the
company. You're paying me 100bucks a month, and I'm paying 10
bucks a month in network cost tosee you would put that 10 bucks

(36:31):
in cogs? Yeah, wow, that's like,in my like, you know, I've been
in all types of businesses. I'venever done that, and even in
public companies. So that meansit's not required by gap
accounting, you. So it's moreopinion based, because I that

(36:55):
happens after the thing is sold.
My view is COGS is what itrequires to sell the

thing. Yeah, in a SaaS world, I look at what does
it cost to service the I mean, Idon't necessarily use exactly
the cogs term on it. I i look atthe variable costs of servicing
the customer periodically, andthose that periodic cost of

(37:33):
servicing the customer whateverit is and it's variable by time,
I bundle that into the variablecost, and which is, subtract
from the revenues to get thegross margin. Yeah, I

think, I think, from a VC perspective, you're
doing the right thing. You don'tcare about, you know, whatever
the prevailing thing is, or thegap accounting rule you care
about, okay, is this a businessI want to invest in and to
understand that you see, okay,how much does it cost these

(38:08):
people to get service a customeron monthly or annual basis, and
you want all that variable costto be in cards across the
revenue? Yeah, exactly.

So ultimately, what you're looking at, what we
call it, is the unit economicsof a customer, right? And, and,
and sort of the the time unitbased profitability once we have
a customer is a very importantpart of that, right? And then
you want to make sure that youhaven't, like forgotten, a lot
of costs that it costs toactually serve as a customer,

(38:44):
right? Yeah. And so the way thatwe frame it is kind of like the
unit economics of it, and thegross margin over the
subscription period is a veryimportant component in

that, yeah, yeah. That reminds me of the
difference between what I wasused to as Ltd in the consumer
world and then I learned it SaaSworld is very different, but
I'll come to that. But beforethat, I want to get your

(39:21):
thoughts on that. On thoughts onlike, how does the equation
change with the size of thecompany in terms of, rather
like, what are the ratios youlook for? Let's say a $1 million
company versus what did we say?
I wrote that down, 3 million, 9million, 18,000,030 6,000,070 2
million. Like, how do the ratioschange of sales and marketing, R

(39:49):
D to as percentage of revenue?
So. Yeah, I

think the census marketing goes up over time,
because it's a little bit hardto put exact numbers on it,
because, like, when you start tostart up, right? Unless you've

(40:23):
built a product, you don't haveanything to sell. And, you know,
tends to be like to find outwhether somebody actually wants
to find product market. It tendsto be like founders meeting
early customers, right? So inreality, a very large cost. Part
of this cost stack is R and Dfor developing the product and

(40:45):
sales and marketing. Andcertainly it might be that
founders spend a lot of timetalking to customers and product
people spend time, which tend tobe founders spend a lot of time
talking to customers. But inreality, the resource allocation
of a company is primarily r, dor product development, right?

(41:08):
And as you mature, you have to,like, reach more customers to to
grow, and you start buildingsales and marketing to to
achieve that. But you can, like,overcook that, because
typically, you know, you havesome sort of iterations to to
really find product market fit.
And then, you know, then youhave to find an effective way of
doing sales and marketing. Andthat's also a learning loop,

(41:31):
right? You just don't pour moneyinto sales and market until
that's sufficient, right? So, soit tends to start with very
little sales and marketing. Andas you become a mature company,
you know your productdevelopment is actually the
least or the thing that scalesthe most, right? Because

(41:53):
certainly, well, if it's asoftware as a service company,
you supply the same code base toall customers through
deployment, and it doesn't youhave, you don't typically have
to add a lot of extra R and D toserve more customers, and then
sales marketing becomes a largerproportion, right? So I think at

(42:16):
Series A, that it's still acompany that has more R D than
sales marketing, but a maturecompany has much more sales and
marketing activity than R D,

yes, of course.
But what are the general numberslike? What are the rule of
thumbs like at Series A, whenyou fund a company at million
dollar revenue, or Arr,generally, the sales and
marketing is X percent ofrevenue, and R and D is y
percent of revenue. So what arethose numbers and how do they

(42:52):
change? Let's say when it's$18,000,000.03 years from the
fund. Okay, there

is no general rule, I would say, because it
depends how difficult whatyou're doing is. So say you're
deploying an app where, likemost of the nation, is just
doing something where the userexperience is better. That
doesn't require a lot of r, dand a lot of your efforts going

(43:26):
to the go to market part. Youdon't need a lot of engineers to
build a better front end, if youlike, whereas, say, this is some
sort of data heavy, machinelearning, complex back end
thing. A lot of value is in thatbit, but it's really hard. And

(43:55):
then, you know, even at SeriesA, maybe, you know, 70% of your
organization is R D, and therest of it is, you know, GMA and
sales, marketing or or somethinglike that.

Okay, but directionally, as you grow R D
should go down as percentage ofrevenue, yeah, should go up as
per se has a revenue.

So you can look at for listed companies, you can
look at this, and I would saythat most of the I think, I
think, like Nordic, companiesare probably bigger on r&d
relative to sales and marketingthan you will see in the in in
the US. But I would say that atseries A what I see in the
Nordics, certainly, more thanhalf of the staff are R and D

(44:45):
and product people. If you lookat like the US, you would see
that. I think of all the IPOswe've looked at, I think. I
assume, was the one with alarge, smallest proportion of of
the cost. That was r, d, and itwas like 10%

Yeah, it's all how you know you define it. It's
like, very subjective, veryquickly, if it's salary, but
it's I remember, you know, formy own or I vaguely remember
from my personal investingexperience, like Salesforce. Few

(45:36):
years ago, 66% of revenue wasgoing into sales and marketing,
66% two thirds of revenue. Like,I don't remember the year, but
at some point, a few years ago,there was the number, and that's
because I was shocked from mylike, I had never seen that

(45:58):
before, so that's why I rememberit, yeah, and you see that like
it's a normal thing for biggercompanies that are growing fast.
That's how it's been in salesand marketing, 66% of revenue.

I 66 sounds high, but if you look at, if you look
at, you know, the companies thathave have listed in the US over
the last,last years, you know, a lot of

(46:39):
them have great unit economics,and yet they're losing a lot of
money, and the reason for thatis that they're pouring money
into sales and marketing to growfast so so like this over
relative overspend in salesmarketing relative to other cost

(47:09):
buckets in a company is is quitenormal, so to speak.

Yeah, that reminds me of something else
I've seen change, and maybe a, bto b, SAS, thing. And for people
who are, you know, younger, it'slike relatively new thing, B to
B, SAS. It used to be alllicensing, and everything was on

(47:40):
prem. So it's like, I've seenthat in my lifetime, and it's so
normal. If we entered theworkforce in like 2010 or 22,000
a you don't even know what itwas like, like for you. This is
the norm, like when I havediscussions with, you know,

(48:00):
newer developers or who are justgraduating, they don't consider
memory and compute cost. But ifyou were, you know, doing
software development 20 yearsago, 25 years ago, that was a
constraint you had. Now it's nota good thing. But where I was

(48:23):
going with that. Something elseI've seen changes in the income
statement. It was SG, a the lineitem, now sales and marketing,
the separate line item. Then.
GNA, have you noticed that? RNA,like I. I noticed that few years
ago, like it, and mainly again,this was in the SaaS world.

(48:44):
Yeah, no, I

haven't really thought about that. So I just
looked up a statistic. SoKeyBank, which is an investment
bank, have done a survey of selfprocess service companies, and I
don't know there's some 200companies or something that's
answered, and they're like froma few million dollars of revenue

(49:14):
up to, Let's say, 50 $200million of revenue, and the
medium sales, marketing spend aspercentage of revenue is 36 but
the range is from 9% to 109%

and What stage of the company? Like, how big is
the company? Or does it not say,yeah, so, I

mean, they've surveyed, you know, from, let's
say, $1 million ARR to theHumber, but, but they have
excluded for this particulargraph, companies that are less
than five millions of AR,

okay? This is 5,000,200 200 Okay, okay, wow.
Yeah, you're right. No rule ofthumb here how crowded the
market is and how much you needto create a new market category,

(50:21):
or you have the valueproposition is so clear, yeah,
it depends on a lot of factors.
So let's come to the finaltopic, which was, I thought
that's how we started. We willtalk about in this episode, is
attack and LTV ratios. So theprevailing wisdom in Silicon

(50:42):
Valley is, oh, if you're ifyou're B to B SaaS company, and
if your LTV Recker ratio is lessthan three, then you're not good
enough, like Andreessen, or thebig firms won't invest in you.
So it's like and lot of thesmaller venture firm use that as

(51:03):
like a filter mechanism. Oh,don't talk to us if your LTV CAC
is less than three. So how?
Okay, before I ask you yourview. Now I want to come back to

(51:24):
what I mentioned earlier, how myview of the LTV from the
consumer world was LTV, it'slifetime value of the customer.
It's about the profitability ofthe customer to the organization
or its sum of cash flows overtime. So that meant you the

(51:47):
formula is, you take, you knowhow much it costs for you to
acquire the customer, and howmuch are they you per monthly
divide that by turn, and thenyou look at how much does it
cost to support that customer?
That's where I think you and Idiffered. Like, for me, that's

(52:09):
cost of supporting the customerdivided by churn. So that gives
you okay, this is the lifetimeprofitability of the customer.
But in the B to B SAS world, Inoticed LTV is basically revenue
divided by char. So there's noaccount support cost taken into

(52:33):
account. Or that's why you lookat, you know, LTV divided by CAC
to get the actual idea ofprofitability. So that's very
different than what I was usedto in the consumer world. So
okay with that clarification,assuming you know that's how

(52:55):
people define it, revenuedivided by churn or ARR divided
by churn. What is the like? Whyis three the magic number? And
when you invest, do you look atthat and what? What do you how
do you take that into accountwhen making an investment

(53:20):
decision into a startup. Yeah,

so, so let's just take a step back, right? So,
like the framing is, first ofall, like we were in this series
a setting, right? Is it, is itmature enough that was kind of
revenue run, right? It was like,Is it growing fast enough, and
is it, is the gross margin goodenough, right? That's sort of

(53:47):
like basic qualifiers, are we inthe ballpark? Yeah, and, and,
and, I'd say, like the the theLTV to cap ratio three is also a
rule of thumb. Kind of thing tolook at, just to put it in the

(54:08):
ballpark. And I think, onceagain, we think about it as a
rule of thumb and and the waythat I think about it is it
should be at least that, right?
And when you say that the LTV islike the the revenue over period
divided by the churn over thatperiod, that is as kind of true,

(54:33):
but it's, it's an approximation,right? What you said from the
consumer world actually holdshere as well. It's just that,
you know, you're used tothinking about, well, you know,
the gross margin is 90% so thisis an approximation that's good

(54:54):
enough if, if the GM, the grossmargin test. Doesn't hold up,
then that LTV simplificationalso doesn't hold up. So I think
that's important to keep inmind. And then the way to think
about it, it should be at leastthree, even if that's an
arbitrary number, if it shouldbe at least three, that means

(55:15):
that, well, if it's well abovethree, doesn't matter that, you
know, gross margin is 90%because it's close enough
anyway, right? So, so I thinkit's more about approximation
and I but I think thatfundamentally you should there
are a lot of people who areoversimplifying here and don't

(55:37):
understand the consequences,right? Because there are
different definitions of LTV andthere are different definitions
of CAC and and also, I think,like the number of three is so
arbitrary that it looking atthat in isolation, also get you,

(55:57):
you know, off essentially and,and the reason for that is that
I tend to look at anotherparameter as well, which is kind
of the payback period. Which isessentially, how long does it If
so, if you assume that churn isvery low, and that's why your

(56:25):
LTV is very big, right? Becauseit, you know, your average
customer lasts for 1010, years,because your churn is so low, is
that actually true? And do wethink that we can see into the
future. So you can, because yourLTV is huge, because you have
this time period, and that paysback cap. But in reality, you

(56:48):
pay back your cat over three orfour years. Three years, let's
say, for argument, if you havean expected lifetime of 10
years, because your turn is lowand and the LTV is is high
because you have that 10 yearperiod, but your payback time is
three years, then you will havea CAC LTV for simplicity, cycle,

(57:09):
3.3 that would be good enough,but, but do we have confidence
enough that the world won'tchange so that the churn will be
steady over 10 years. Thatsounds too good to be true.
Whereas, if you're if your CACLTV is two and a half, but your

(57:30):
payback is three months, that isactually more comfortable,
because you're pretty sure thatthe world is not changing within
the first half year, so youalready paid back your CAC, and
you're pretty sure that thatyou're in the money, right? But,
but to pay the churn, let's sayyou have a huge pay so that,

(57:53):
like your expected lifetime canbe too long to be believable.
But also the churn can be sohigh that even if the CAC LTV is
good in the short term, if youchurn all the customers too
quickly, are you sure you cankeep adding customers for
forever? So there's this likeyou have to balance that and

(58:14):
fundamentally understand what'sgoing on here. And do you
believe that the numbersactually make sense and don't
just make sense when you do thecalculation? Yeah.

By the way, if you have find a business that
has LTV ducac of more than threeand the payback period is three
months, please call me. I willinvest. So it's very nuanced. I

(58:50):
think what I have from theconsumer world, I think it's
much more accurate andinsightful definition of LTV.
It's the lifetime profitabilityof the customer in the SaaS
world. You just look at therevenue as LTV, assuming it's

(59:12):
90% margin, assuming low churn,so and, etc. So I still find
that more insightful. But, youknow, it's a bigger equation.
People have to think more. Sorule of thumb is like rule of
you know, three fingers. Nobodywants to lift three fingers. So

(59:34):
it's kind of prevailing thing.
Now just do this simple thing,Ltd by CAC, not three we are not
investing

well, but I don't necessarily well. I halfway
agree with you, but I don'tagree with you fully, because
the simplified formula, which alot of people use, to be honest,
but you know, people need tounderstand. That's a simplified
formula, right? Is good for,sort of rule of thumb, and quick

(01:00:06):
check. It's not actually goodfor, like, understanding, truly
what's going on in this. This agood business. So it sort of
helps in terms of, let's say youhave to look at 100 deals per
day. And you know, it helps.
It's helpful for putting 20 ofthose 100 into a box to look
closer at, but it's not actuallyhelpful in terms of

(01:00:28):
understanding the businessfundamentally. Yeah,

Chander Chawla (01:00:32):
you're right.
Yep, absolutely. Like, from a VCperspective, it may be helpful
if you're getting, you know, 100calls a day, and how do I figure
out who to talk to? So it may behelpful, but I'm saying like I,
you know, as an operator, I lookat fundamentals. So for me, the
LTV from the consumer worldhelps me understand the

(01:00:54):
fundamentals much better. And Ia sidebar is how the world works
in reality is, I had thisdiscussion with another VC in
who remains unnamed, in the BayArea, so I asked him, like, why
is the three? Like, why is itthree? Like, what's wrong with

(01:01:17):
two? Like, I would, if it's cashflow positive business, it may
not give you, you know, an extrareturn on your investment, but
it's still a good business.
Like, why do you look at three?
So after a long discussion, thesummary was basically, oh,
because, and recent, Horowitzdoesn't invest in less than

(01:01:37):
three, so we're not going to beless so it's basically people,
you know, copying others withoutapplying their own thinking. So
I'm glad you're not doing that,

Arne Tonning (01:01:53):
but, but the three, the three, kind of gives
margin for error, right? And,and. And the reality is that,
fundamentally, too many of thisbusinesses have too long a
payback period and, and thereality is, then you can't
really trust it, so you want tohave, like, some margin of

(01:02:17):
error, or whatever we should

call it as Buffett would call this margin
of safety, yeah, yeah, yeah.
From a VC perspective, you know,filtering the deals from 100 to
20, I think it makes sense, likeyou want that margin of safety,
yeah, but that doesn'tnecessarily mean you are a bad
business. If you're LTV to CAC,as defined by B SaaS world, is

(01:02:40):
less than three.

Okay, so particularly not if, if you know
there are like E commercebusinesses where we're like the
first transaction is profitable,so you don't actually have any
risk on the first transaction.
You don't know if the customerswill transact again, yeah, but

(01:03:07):
if they do, then it's veryprofitable. But, but, like, the
payback time is instant, so youdon't have to have a tax
lifetime of free to bet on that,as long as the CAC is not too
elastic,

and you are, for the listeners, I want to clarify
you're defining payback periodis time it takes to get the CAC
back exactly

in that setting, you also have to, like, not only
take it in revenue terms, ifthere's actually cost of
servicing the business as well.
So it's, it's like, your grossprofit on, on whatever payment
stream you get, not, not justthe gross revenue,

yeah, so for, yes, that's good. Thanks. So
let's say, you know, I'm abusiness, and I it took me, you
know, let's say 200 bucks toacquire a customer, and they're
paying me 20 bucks a month, andit's costing me five bucks a
month to support that customer.
So let's say it's 200 to acquirein a year. I have two $40 in

(01:04:25):
revenue from them, so five bucksa month, at $60 per year. So
that's 260 so 240 and 260 wouldbe 13 months. So the payback
period in this case would be 13months, because it would take me
13 months to recover $260 Yep.

(01:04:53):
Now let's get into what do youinclude in tech? So there is,
you know. Money you spend onadvertising, there's salaries
of, you know, people in salesand marketing, excluding brand.
What else is there? Or is that?
How you calculate? CAC, what'swhat's in? CAC,

well, there, there are multiple cats wondering
about out there, but so there'sa paid CAC, a direct CAC, and a
fully loaded CAC. And so thedifference between these are

(01:05:40):
like Peg Cat is essentially thepaid advertising you do to
acquire a customer. A direct catis that plus individual sales
people that are involved inclosing that customer and the
fully loaded cat is essentially,you know, your total budget for

(01:06:04):
a period of all sales andmarketing activities divided by
the number of customers you getover that period. And I think in
for venture capital purposes, Igo for the fully loaded because
that's ultimately what impactsyour unit economics. I think you

(01:06:27):
can probably argue that Januaryin that well, if you stuck brand
in here, and the brand doesn'thave an instant payback, it has,
like, accumulated payback overtime, and so that should. It's
incorrect to put that in there.
But most of those startups welook at don't really spend money
on brand, to be honest. So welook at the full fully loaded,

(01:06:50):
because we view that as as asthe right metric in terms of
unit economics. Is this actuallyprofitable? Is it profitable to
get and serve these customersover time. That doesn't mean
that like a paid cat is aninvaluable metric. It just maybe
works better for marketingperson who who can look at cats

(01:07:12):
for uh, well, what's the cat onFacebook acquiring customers on
Facebook versus Google, andcomparing those two metrics and
say, Well, I shift my marketingspend from one channel to
another or something like that.

So when you look at the fully loaded tag, Arna,
like, is there rule of thumb orguidance our listeners can use
from you on, like, what is thedecline rate? Like I've seen,
I've launched products where,generally, like, somehow, I

(01:07:58):
don't know why that is, butsomehow, in more than three
occasions, the new products havelaunched. The CAC was around
3000 and then, when you start,and then you know, you fine tune
and learn and iterate, and youcan bring it down to 1000 pretty

(01:08:25):
fast, from 3000 to 1000 I havebrought it down in three months
or less. But after that, it'stricky. Like how what have you
seen? Are there general likerules, or initially it's going
to be high. Anything you do whenit's new, you gotta spend money

(01:08:48):
to make people aware, get theminterested, free trials,
whatever, like, what are therules? Or what do you see in the
market, or how you makeinvestment decision. Okay, there
can't give this much, but theycan bring it down to XYZ.

Yeah, this is one where I wish I had better
answers on, you know, rules ofthumbs, because i i I mean, I
mean, the pattern that youdescribed is obviously correct,
but

it's not just me. You see that like my view
is, you know, let's say three tofive startups. I've personally
done this ad, and maybe, youknow, 3040, startups I've spoken
with, but you have much broaderview. So you see that as a
normal pattern,

yeah. So, so I think there are fundamental
reasons why the pattern isnormal, right? Because, you
know, as you start up, part ofthe reason why, as you say, it's
unknown. So. Forth, but, but theother reason is that you know
every marketing and salesmarketing problem is unique in a

(01:10:08):
way, and so is finding like yourultimate customer profile, and
you know your segments and soforth. So there's just these
learning loops right about wheredoes it fit and and how does it
how do we execute, right? Sothere's a learning group that is

(01:10:29):
naturally as you learn, you getbetter, and it improves a lot,
right? But, but the speed ofthat improvement and the
magnitude of that improvementhas a lot to do with how well
you've you hit in the firstplace, how skilled are the
marketers and the salespeople?
How good is really the product,relative product market fit and

(01:10:50):
so forth. So the pattern isconsistent, but but the pace of
learning and so the payback youcan get from executing is very
different. And secondarily, thepattern that it then has a
tendency to sort of slip awayfrom you over time, or worse

(01:11:11):
than, if you like, is also dueto underlying reasons, right?
Because there's some lowerhanging fruits, once you've
found them, you know, you havechannels, maybe for marketing
purposes, that are veryeffective, but they saturate, or
they shift and and you have tofind new channels or or so

(01:11:35):
forth. And it just gets harderas as you become bigger. And
once again, that depends on howbig your segments are, and you
know what kind of channelsyou're on, and these sort of
things. So I, I think this is aquestion for for, for maybe deep

(01:11:56):
operational marketing people andsales people and growth people,
rather than a venture capitalistlike me, because, you know, we
can have the luxury of lookingat the metrics on a comparables
level, right, and go, Well, youknow This, I'm not sure about,

(01:12:19):
so I just don't do the deal,whereas this is, like,
brilliant, so I'll do that dealif, if you like, yeah, and, but,
but even if it looks brilliant,it's bound to change over time.
Nothing stays brilliant.

Yeah. So it's what I in operational roles I've
seen. So I think I've done 3000to 1000 few times and couple of
times 3000 to below 300 but Isee, like lot of times, after a
quarter, the organizations losepatience. As you said, they're

(01:13:03):
learning loops. Sometimes it'seasier. You can do it faster,
but sometimes you just have tospend money to figure it out.
And to get to that below, let'ssay 300 or some number that
makes sense for LTV. But how inyour when you look at the
numbers and startups, like, whatis the right time period for

(01:13:27):
experimentation and after that,if you can bring it down to
where you need to be, then yougive up. Like, is it a year? Six
months? Yeah, I definitely cansay in three months, you can
bring it down from 3000 to 1000but generally not 3000 to 300

Yeah, I don't know. So, so, like, I think a
lot of the companies that we seeand and look, we do early stage
and we do SAS. I think, I thinkthe the what you describe is,

(01:14:15):
you know, getting low enough isa bigger problem in some other
segments than SaaS in, likeconsumer and so forth. This is,
you know, huge challenging in ingaming, right? Because the LTVs
are so low, and you, you know,you have, you just massive

(01:14:37):
volumes, but you have to get thecat so low is, is, is like a
big, big challenge, and I thinkthis is a bigger pain point
there. What we see more in inSAS, in particular, early stage
SaaS, is that actually the CAC,LTV, is actually pretty good,

(01:14:59):
but.

Sorry, pretty good is three, like, when you
say CAG, no,

I mean, I mean, we see 1010,

yeah, but CAG is 10, yeah,

absolutely, and, or eight or seven or something
like that, but,

but

the problem is that, like you can hustle your
way to half a million dollars orsomething like that, but it
doesn't mean that you havesomething that scales right in
go to market terms, andimmediately you start putting
money into it, and it's like youfound like a small Gold Orb, but

(01:15:47):
you haven't found a big one,right? And, and once you try to
scale the sales marketingorganization, it turns out it's
not effective at all. Right?
There's not this. I mean,there's product market fit with
the segment, but you actuallydon't have, like, a great go to
market machine that you can justput money on. Yep, yeah.

Well, what is there? Like, let's say you are.
You have to try to bring the CACdown to a number that makes
sense for Ltd, how much time doyou give? Is it six months?
Three months? Let's say you havein a lot of money. Money is not

(01:16:35):
an issue like howintellectually, how long does it
take how many learning loops ortime should it take for you to
figure out, can I bring CAC downTo a certain number?

Yeah, so, so, you know, I'll it slightly
differently. Okay, so the waythat I frame it is because of
the role that I have, right? I'ma venture capitalist, and I
don't, I don't run theiterations of experiments on a
daily basis in these companies,but I sort of, I'm, I, if you

(01:17:19):
like, bet on companies or backcompanies, right? But when we
do, they tend to have like aplan, and they have a
performance, and it's a backableperformance at a time that we
put the money in, right, atwhatever stage they are, which,
you know, if it's pre seed,there is no performance, but
it's a bet on an idea, right?
All the way to like there arelike for whatever stage, the

(01:17:40):
current performance isreasonably good, but there's no
guarantee that that willcontinue or scale. But
ultimately, you put the money inand the company ends up with,
let's for argument's sake, say,18 months of runway. It could be
12 or it could be 24 but, butgenerally you have a, you know,

(01:18:01):
a plan and a burn rate, and youhave a time frame, yeah, of
that, and, and so within thattime period, you have to
experiment, or the team has toexperiment to get An outcome to
make it fundable after those 18months. And if it's a running

(01:18:22):
business that that meansessentially tripping the
revenues and proving thatcustomers want it even more or
whatnot, right? And soultimately, it's a question of
how many experiments it's howquickly can you get feedback to
improve? How many experimentscan you run in 18 months? And
those could be sales, marketingexperiments. It could be product

(01:18:44):
experiments. And soon, the laterin this age, it's less product
and more good to market.
Because, like, you know, if youalready have $3 million of
revenue, something is right withthe product, right? But
ultimately it's not so that Isay, Well, you have only three

(01:19:07):
months to prove this. This isfor the management to say. Well,
my input would be, you're out.
Your job is to maximize thebusiness before the next time
you need to raise money, right?
Yeah, and it's for management tofigure out whether they will.
And ultimately, you do that byif it's runs great, just keep

(01:19:32):
optimizing. But if it, ifsomething breaks down, you need
to experiment your way out ofit. And then it's a question of
maximum number of experiments inwhatever direction you take
those experiences within those18 months. But I don't have like

a

emergency break at three months for anything this
is for management to andfounders to sort out. Right?

Okay, I see. So let me. Me summarize what I
heard as a VC you invest in,let's say, series, a that gives
them 18 months to figure allthat out, do structured
experiments and see where youknow how you can get the CAC to
a number that makes sense forthe LTV. So there's no like, a

(01:20:20):
hard line or expected. It may bethat, you know, they experiment
for a year, nothing happened.
Then suddenly they find theclick, and then it goes down. So
for ignorant perspective, youare betting that in 18 months
they'll figure it out.

Yeah, I mean, I don't get my money back anyway,
unless they succeed Some way orother. And succeeding is
generally figuring things outwhich makes it fundable again.
There are instances where itgoes break even, or it gets
sold, or it fails, right? Butobjective, generally, if it's

(01:21:00):
going to grow very fast is tobring it to the next level, to
make it fundable next timearound.

Yeah, yeah.
Makes sense. Wow, thanks, Arne.
I'm glad we are back with abang. This was so much fun.

Yeah,

you know, this is still season four. Yeah, this
was just a summer break wherenew season will begin next year.

Yep, yeah. Okay.

So thank you, Arna, for the echo. Read again.
I am falling asleep now which Iwill go home and do.

Well was wells to you were micro impacted by the
Aquavit today, I think we cansafely say that you're not too
dependent on Aqua since thebottle has lasted more than a
month already.

Oh yeah, there's still a lot left, so you can
still have some somehow. Youknow, I'm a fan, but the Nordics
and the Swedes and the Finns arenot, because at the innovation
house here, I offer it toeverybody, but nobody wants to
drink, which I don't mind, but Iwas surprised, because it's a,

(01:22:24):
you know, Nordic pain. But Ihope I can have one with me
soon.

Yeah, maybe it's a particular selection that makes
it to California that's notrepresentative of the whole
population,

yeah, or maybe I should go to Oslo and join you
there somewhere. Yeah. Thank youfor joining us. We'll see you in
two weeks. Bye, bye, bye.

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S4E10: Startup Financials - LTV and CAC in B2B SaaS

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.css-14f5ked{margin:0;word-break:break-word;display:-webkit-box;-webkit-box-orient:vertical;box-orient:vertical;-webkit-line-clamp:2;overflow:hidden;}S4E10: Startup Financials - LTV and CAC in B2B SaaS