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Mentor
What do you mean by scalable, the technical implementation or the business model?
Mentor
While we’re on the topic of CAC, LTV, and churn, this is an article I keep coming back to on those: https://www.forentrepreneurs.com/saas-metrics-2/
Thank you! This is my weekend reading!
I have no idea what the startmarke dude is talking about. (Actually I do, that question would be relevant to scalable systems.) For a business to be scalable, you have really just need to focus on capacity and demand. Is there untapped demand for what you are offering? Yes? Good. Can your current operations meet that demand? If it's a digital product, yeah server capacity and whatnot matter. If it's a good based business, then you will have to look at your manufacturing. If it's something like a service business - say a restaurant. It may be very expensive to scale. But there may be an aspect that is scalable. Like Starbucks ready to drink coffees sold in every grocery store and gas station.
Thank you! This does give clarity and a lot to plan for. My business is presently in the ideation stage. It’s service and it’s subscription based. On that note, I assess that there will be a point when people have to end their subscription because the service I offer is based on a tenure. I am looking at how can I measure scalability in such business activities.
1. Is there a larger market out there than you've reached? (if not, can you pivot?)
2. Can you become more relevant in the target market? (unique value prop, marketing, etc)
3. Can you support the demand once it comes? (technical, staffing, funding, etc)
If yes to all, you can grow.
Thank you for the inputs! I will churn this out in the weekend and factor in these questions that can help me design better services for my target audience.
Can you get 10,000 customers paying $10 a month if so congratulations you have a $1.2 ARR.
Can you get only get 100 customers paying $1 a month, then you’re in a tough boat and have a 1.2k ARR
Or are you Facebook with 1 billion customers and increasing and a $1.5 ARR and low churn. then you’re in good shape
After that step:
How do they churn, do those 10,000 customers leave after 1 year? If so, can you recruit 10,000 new customers each year in order to maintain that 1.2million ARR. if not, then that’s an issue.
CAC, LTV, and churn are your best friend and worst enemy
I couldn’t agree any more! I so get what you are saying. This whole entrepreneurial experience is different from what’s in the books!
I like to think of it like this. If you got a million customers tomorrow can your systems and processes take care of it without your input. I see so many times people are focused on sales but not delivery. You need to master delivery before you can scale sales.
Automate everything as soon as possible. If you ever need help with automating your marketing feel free to dm me. I write a blog on automating processes
Absolutely. I write helpful articles here that may be useful http://lifewithtina.medium.com
What are the top three apps used within your tech stack to manage workflows and operations?