What is a good CAC for a SaaS startup?

There is no universal number. It depends on your LTV. A $500 CAC is fantastic if your LTV is $5,000. It is terrible if your LTV is $600. The LTV:CAC ratio is what matters. Aim for 3:1 or higher.

What is the difference between ROAS and ROI?

ROAS only counts ad spend vs ad revenue. ROI includes all costs: ad spend, tools, team time, creative production. ROAS of 3.0 might mean ROI of 1.1 once you factor in everything else. For solo founders, ROI is the more honest metric.

Should I use Performance Max as a solo founder?

It depends on your product. PMax works well for ecommerce with clear margins and strong product feeds. For SaaS or service businesses, PMax often wastes budget on branded searches and low-intent placements. If you do use it, exclude your brand terms and track new customer CAC separately.

How do I calculate LTV if I have only been in business 6 months?

Use a conservative estimate based on your data so far. If most customers are still active after 6 months, assume 6 months as your floor. Recalculate every quarter as you get more data. An imperfect LTV is better than no LTV at all.

Which attribution model should I use?

Start with last-click (it is free in Google Analytics). Add 20-30% mental credit to your awareness channels. If you scale past $10k/month in ad spend, invest in a multi-touch attribution tool. Until then, last-click plus common sense works fine.

CAC, LTV, ROAS: marketing metrics for solo founders

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You open your ad dashboard and see a number that says ROAS: 2.4. Is that good? Bad? Should you double your budget or kill the campaign?

Most marketing metric guides assume you have a finance team. They use words like "cohort analysis" and "discounted cash flow." You are a solo founder. You just want to know if the money you spend on ads comes back with friends.

This glossary covers five terms every founder needs: CAC, LTV, ROAS, PMax, and attribution. Plain english. No pivot tables. Let us start.

Customer acquisition cost (CAC) in plain english

CAC is how much it costs you to get one paying customer. Not a lead. Not a click. A customer who hands you money.

The formula is simple: total marketing spend divided by new customers acquired. If you spent $1,000 on ads last month and got 10 new paying users, your CAC is $100.

The trap: most founders only count ad spend. Real CAC includes everything. Your time writing content. Tool subscriptions. The $29/month Canva Pro you use for ad creatives. If you only count Facebook's invoice, you are lying to yourself.

Blended CAC (total marketing cost ÷ total new customers) is the honest number. Channel CAC (cost per Meta Ads customer vs cost per Google Ads customer) helps you decide where to spend. Track both.

Lifetime value (LTV) and why it matters more than CAC

LTV is how much revenue a customer generates from the day they sign up until the day they leave. If someone pays you $30/month and sticks around for 14 months, their LTV is $420.

CAC alone tells you nothing. Spending $200 to acquire a customer sounds terrible until you learn they pay you $2,000 over two years. Spending $10 per customer sounds amazing until you realize they churn after one month and never come back.

For early-stage founders: your LTV is probably a guess. That is fine. Use a conservative estimate. If customers have been around 6 months and most are still active, assume 6 months. Update the guess as data improves.

The golden rule: aim for LTV to be 3x your CAC. If it costs $100 to get a customer, you want them to be worth at least $300. Less than 3x means your unit economics are tight. More than 5x means you are probably not spending enough on growth.

Return on ad spend (ROAS): the metric that can lie to you

ROAS is revenue from ads divided by ad spend. Spend $100 on ads, generate $300 in sales, your ROAS is 3.0.

Here is where ROAS gets dangerous for founders: it only counts tracked revenue. If someone sees your ad, does not click, but Googles your brand three days later and buys? ROAS says zero. You know the ad worked. The dashboard does not.

Google's Performance Max campaigns are especially guilty of inflating ROAS. They count branded searches (people who were going to find you anyway) and retargeting clicks (people who already know you) as campaign wins. A ROAS of 8.0 on PMax might actually be 1.2 if you strip out the brand noise. We wrote a whole post on how Performance Max lies about your ROAS

For a solo founder: a ROAS above 1.0 means you are not losing money on ads (before factoring in your own time). But do not celebrate a 1.3 ROAS. You still have product costs, tool costs, and your own labor. Treat ROAS as a directional signal, not a profit calculator.

Performance Max (PMax) explained without the google-speak

Performance Max is Google's all-in-one campaign type. You give Google some assets (images, headlines, product feed) and a budget, and it places your ads across Search, YouTube, Gmail, Maps, Discover, and the Display network. You have almost no control over where things go.

The pitch: Google's AI optimizes your spend across all channels automatically. You get more reach for less work. The reality: Google optimizes for Google. PMax will happily spend 70% of your budget on branded search terms you would have won for free and report it as a win.

PMax is not evil. It can work for ecommerce founders with strong product feeds and clear margins. But if you are a SaaS founder running PMax without brand exclusions and proper conversion tracking, you are probably burning money. Read our breakdown of why Performance Max lies about ROAS

Attribution: who gets credit for the sale?

Attribution is the system that decides which marketing channel gets credit when someone becomes a customer. It sounds academic. It is actually the most political question in marketing.

Imagine a customer's journey: they see your tweet, ignore it. A week later they see your Meta ad, still do not click. They Google your company name, click an ad (oops, money spent), browse for 2 minutes, leave. Next day they type your URL directly and sign up. Who gets credit?

There are three common attribution models, each with a different answer:

Last-click attribution gives 100% credit to the final touchpoint (the direct type-in). The tweet and the Meta ad get zero. This is what Google Analytics defaults to. First-click attribution gives everything to the tweet. The Meta ad and the direct visit get nothing. Multi-touch attribution splits credit across all touchpoints. More accurate, harder to set up without expensive tools.

For a solo founder: do not overthink attribution. Use last-click as a baseline (it is free and automatic), but mentally add 20-30% credit to your awareness channels (content, social, cold outreach). If your Meta ads show terrible last-click ROAS but your direct traffic is climbing, the ads are probably working.

How these metrics fit together

None of these metrics work in isolation. CAC without LTV is meaningless. ROAS without attribution context is a fairy tale. PMax without understanding how it reports ROAS is a donation to Google.

The LTV:CAC ratio is the single best health check for a solo founder's marketing. It answers one question: for every dollar you spend acquiring customers, how many dollars come back? A ratio of 3:1 means you spend $1 to make $3. Below 1:1 and you are paying customers to use your product. Above 5:1 and you are probably underinvesting.

How to calculate your LTV:CAC in 30 seconds: take your average revenue per customer per month, multiply by your average customer lifetime in months, then divide by your CAC. If the number is below 3, you have work to do. If the number is above 5, spend more on ads. Simple as that.

What solo founders should actually track

Do not build a 12-metric dashboard. You will spend more time maintaining it than acting on it. Track these four numbers weekly and you will know more than most funded startups:

Blended CAC: total marketing cost (ads + tools + your time at a fair hourly rate) divided by new customers. LTV (conservative estimate): monthly revenue per customer times your best guess at average lifetime. LTV:CAC ratio: the number that tells you if the math works. Revenue trend (not ROAS): is total revenue going up month over month? ROAS can lie. Revenue does not.

If you run Google Ads or Meta Ads, also track new customer CAC by channel. But keep it simple. A spreadsheet updated weekly beats a dashboard you never open.

One final thought: metrics exist to help you make decisions, not to make you feel smart. If you spend 3 hours every Monday building reports and zero hours acting on what they tell you, you are doing data theater. Pick your four numbers, track them in 10 minutes, and spend the other 2 hours and 50 minutes on things that move the needle.

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