It was a good question. It was a tough question. I struggled with it, and in the end, I had to reframe it in order to answer it. I couldn’t get past the fact that expectations imply something that happens that’s out of the founder’s control.
And that’s what I want to talk about in the post: How important it is for an entrepreneur to understand what’s in their control and what isn’t.
What outcomes can you determine?
I’m not an academic, but I am a long-time entrepreneur with a varied history of companies, products, roles, skill-sets, and experiences. In all of those experiences — good and bad — customer acquisition costs, as a metric, is something the team has a lot of control over.
Admittedly, there’s the part of that equation where the conversion has to happen, and that’s not something that can be flipped like a switch. But there are plenty of switches, sliders, and knobs that can be manipulated to produce a different, and hopefully more positive, result.
I had a similar question when an entrepreneur asked about a metric to apply to finding product-market fit. P/M fit is a bit different, because it’s not binary and it’s more of a goal than a measurement. But like CAC, it’s not something for which you wait to see how the data shapes up.
Whether it’s a target cost of customer acquisition or the achievement of product-market fit, there are a ton of variables the entrepreneur can control in order to produce a better outcome.
When you’re a startup there’s no book to play by
Finally, I got into a cordial discussion last week about when a minimum viable product is still an MVP. The long and short of that one was that you don’t get to decide if your product is viable or not, but you have total control over the makeup of the candidate.
What I want to promote in all my posts, and in all my advice, and especially when answering questions for Teaching Startup, is that in order to achieve a viable product, or product-market fit, or a CAC that produces solid margins, you need to understand what you can control, and you need to be constantly tweaking those control components and improving the results.
Don’t wait for a standardised model to tell you what to do. After all, another startup’s past performance is not a predictor of your future results.
If you want the answer to the customer acquisition costs question and expert answers to over 100 more questions asked by working entrepreneurs, grab a free trial of Teaching Startup.
This article was originally published on Medium by Joe Procopio
Joe Procopio is a multi-exit, multi-failure entrepreneur. He is the founder of startup advice project TeachingStartup.com and is the Chief Product Officer of mobile vehicle care and maintenance startup Get Spiffy. You can read all his posts at joeprocopio.com
If you want more direct advice and answers, look into Teaching Startup.
