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Andreessen Horowitz "16 Startup Metrics"

Andreessen Horowitz "16 Startup Metrics" is a tier 2 source on AskedWell — Established editorial reference. Cook’s Illustrated, King Arthur, Serious Eats class. It's cited in 4 cooking, fermentation, and baking answers. Click any answer below to read the cited claim in context.

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  1. what is the difference between… · business

    What is the difference between CAC and LTV?

    CAC (Customer Acquisition Cost) is what you SPEND to get one customer. LTV (Lifetime Value) is what that customer is WORTH to you over time. The CAC:LTV ratio is the canonical SaaS health metric — 1:3 is the benchmark, <1:1 means burning money, >1:5 usually means under-investing in growth.

    Why we cite it here: Definitive unit-economics framework; both CAC and LTV calculation methodology

  2. what is… · business

    What is customer lifetime value (LTV)?

    LTV (Lifetime Value, sometimes CLV) is the total profit one customer generates over their entire relationship with you. Formula: ARPU × Average Customer Lifetime × Gross Margin. For healthy SaaS, LTV should be ≥3× CAC. Best-in-class: ≥5×. Most founders overstate LTV by 2-5× using revenue not gross profit.

    Why we cite it here: LTV definition + relationship to CAC + payback period

  3. what ratio of… · business

    What ratio of CAC to LTV is healthy?

    The canonical SaaS health benchmark is 1:3 (David Skok, Bessemer). Below 1:1 = burning money. 1:2 = marginal. 1:3 = healthy. 1:4-1:5 = strong but possibly under-investing in growth. Above 1:5 = either undermonetized OR understated CAC OR inflated LTV — investigate the inputs.

    Why we cite it here: Definitive unit economics framework

  4. what ratio of… · business

    What ratio of sales to marketing spend should you target?

    The Magic Number — net new ARR added / total Sales+Marketing spend — measures growth efficiency. Healthy Magic Number is 0.75-1.0+ (1× means each $1 of S+M spend produces $1 in new ARR within 4 quarters). Within S+M budget allocation: PLG (50/50 ratio) · enterprise sales-led (70-80% sales) · SMB marketing-led (60-70% marketing).

    Why we cite it here: Magic Number + sales productivity framework

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