July 2015 Posts

How to lower your Customer Acquisition Cost

How to lower your Customer Acquisition Cost

You can’t be an entrepreneur without a healthy streak of optimism. There’s just no way you can survive the gruelling task of trying to convince yourself and investors to believe in a dream while shrugging off a steady stream of rejection.

But while optimism might be a crucial personality trait for entrepreneurs, it’s often accompanied by self delusion lurking nearby in the bushes. This could mean convincing yourself of product/market fit when there isn’t one, or forecasting an unrealistic CAC (Customer Acquisition Cost).

I’ve seen many startups solve the product/market fit problem, only to fail when the cost of acquiring and monetizing customers turns out to be higher than expected. Previously, I’ve talked about how to balance CAC with Customer Lifetime Value (LTV), but I didn’t go into the gory details of how a crafty entrepreneur goes about keeping CAC low. 

4 Reasons Why the Bottom-Up Approach Is a Great Way to Sell SaaS

4 Reasons Why the Bottom-Up Approach Is a Great Way to Sell SaaS

Sometime late in the last decade, there was a subtle but important change in the way companies began to adopt enterprise software. Instead of new technology coming in by way of the CIO or IT department, employees began driving the adoption of new tools. I am referring to tools like Salesforce, Netsuite, and, of course, Slack.

Recently I’ve had the opportunity to mentor a fast-growing SaaS business that is using this bottom-up model. For a guy whose experience has been almost exclusively with the top-down approach that requires selling to VPs and C-level executives, this has been a great learning opportunity.

While I can’t say which has proven to be empirically better, I can say that I find a lot to admire in the bottom-up model.