Omg, yes! If your business numbers do not make sense on the spreadsheet (and I'm talking real numbers like CAC, as you've mentioned, and not future financial projections based on optimistic assumptions), then it would be difficult to grow sustainably.
Sure, ambition, storytelling, publicity, differentiation, and a good team matter for success, but financial health is what is ultimately going to keep it in business.
"Treating founder labor as free forever" — this one quietly kills more solo SaaS businesses than anything else. When you're bootstrapping, your time IS the subsidy that makes the economics work. But it creates a false sense of profitability.
For bootstrapped solo builders, I'd add a fourth number: time-to-value. How quickly does a new user experience the core benefit? Because with low-touch SaaS at $20-50/month price points, you often can't afford any CAC beyond content marketing and word of mouth. Your payback math only works if activation is near-instant and churn stays under 5%.
The 3:1 LTV/CAC ratio is the right north star, but the real insight is that solo founders should probably aim for near-zero CAC and let the product do the selling.
Exactly. And for low-ticket SaaS specifically, the activation window is brutally short — maybe 10-15 minutes before someone decides this isn't worth $29/month. So your onboarding basically IS your product for the first session.
I've started treating first-run experience as a separate engineering problem from the core product. Different success metrics, different code paths. Sounds obvious but most solo builders (myself included until recently) just build the product and hope the value is self-evident.
Completely agree. At low price points, onboarding is the product until value is felt. Treating first-run experience as a separate system with its own metrics is a great discipline. Without that, even strong unit economics never get a fair chance to prove themselves
Strong framing on CAC expansion. Most early founders dunno that cheap acquisition windows close fast, and the real test is whether the model survives at 2-3x the initial CAC. Payback time is the sleeper metric here tho, it basically determines if growth is self-funded or venture-dependent.
This is refreshingly unsentimental in the best way. I love how clearly you separate stories from systems. Vision, narrative, and ambition all matter, but only after the economic engine closes its loop. Until then, they’re decoration.
“Round up, not down” should honestly be printed and taped above a lot of desks. Optimism is not strategy; it’s a liability if it’s not disciplined by numbers that can survive contact with reality.
Clear, practical, and quietly ruthless: exactly the kind of piece founders should read before they fall in love with their own spreadsheet.
Thanks Petar for highlighting these metrics that define the health of a startup, especially at its initial phase. Having been a student of finance, I am curious to understand how operational and financial leverage fits into a startup's consideration, especially the former, as it scales up or grows into a bigger company.
Operating leverage amplifies whatever unit economics you lock in early (good or bad). It only becomes a strength once CAC, LTV, and payback are already proven, otherwise it just scales fragility
Appreciate that. The uncomfortable part is usually where the real work is. Numbers don’t kill good ideas, they expose weak ones early enough to fix them
Omg, yes! If your business numbers do not make sense on the spreadsheet (and I'm talking real numbers like CAC, as you've mentioned, and not future financial projections based on optimistic assumptions), then it would be difficult to grow sustainably.
Sure, ambition, storytelling, publicity, differentiation, and a good team matter for success, but financial health is what is ultimately going to keep it in business.
Financial health is the constraint everything else operates within. Appreciate you reinforcing that distinction
Me simplifying business "create customers, keep customers" 👈 This is the job 🎯
Exactly. Everything else is a rounding error if you can’t consistently create and keep customers
"Treating founder labor as free forever" — this one quietly kills more solo SaaS businesses than anything else. When you're bootstrapping, your time IS the subsidy that makes the economics work. But it creates a false sense of profitability.
For bootstrapped solo builders, I'd add a fourth number: time-to-value. How quickly does a new user experience the core benefit? Because with low-touch SaaS at $20-50/month price points, you often can't afford any CAC beyond content marketing and word of mouth. Your payback math only works if activation is near-instant and churn stays under 5%.
The 3:1 LTV/CAC ratio is the right north star, but the real insight is that solo founders should probably aim for near-zero CAC and let the product do the selling.
Thank you Lakshmi! Time-to-value is a great addition for solo and low-ticket SaaS. Without fast activation, the unit economics never get a fair test
Exactly. And for low-ticket SaaS specifically, the activation window is brutally short — maybe 10-15 minutes before someone decides this isn't worth $29/month. So your onboarding basically IS your product for the first session.
I've started treating first-run experience as a separate engineering problem from the core product. Different success metrics, different code paths. Sounds obvious but most solo builders (myself included until recently) just build the product and hope the value is self-evident.
Completely agree. At low price points, onboarding is the product until value is felt. Treating first-run experience as a separate system with its own metrics is a great discipline. Without that, even strong unit economics never get a fair chance to prove themselves
You explained those concepts so clearly and its very interesting. Thanks
Thank you Marcela. That was the goal
Strong framing on CAC expansion. Most early founders dunno that cheap acquisition windows close fast, and the real test is whether the model survives at 2-3x the initial CAC. Payback time is the sleeper metric here tho, it basically determines if growth is self-funded or venture-dependent.
Early CAC is almost always the best it will ever be. Thanks for joining the conversation
This is refreshingly unsentimental in the best way. I love how clearly you separate stories from systems. Vision, narrative, and ambition all matter, but only after the economic engine closes its loop. Until then, they’re decoration.
“Round up, not down” should honestly be printed and taped above a lot of desks. Optimism is not strategy; it’s a liability if it’s not disciplined by numbers that can survive contact with reality.
Clear, practical, and quietly ruthless: exactly the kind of piece founders should read before they fall in love with their own spreadsheet.
Stories motivate, but systems decide outcomes. Round up, not down is really about respecting reality before it forces the lesson
Thanks Petar for highlighting these metrics that define the health of a startup, especially at its initial phase. Having been a student of finance, I am curious to understand how operational and financial leverage fits into a startup's consideration, especially the former, as it scales up or grows into a bigger company.
Operating leverage amplifies whatever unit economics you lock in early (good or bad). It only becomes a strength once CAC, LTV, and payback are already proven, otherwise it just scales fragility
Yeah that makes sense, thank you for clarifying the multiplier mechanism of it, Petar!
Ignore the math, and even the best idea can collapse quietly but irreversibly.
Exactly
This is super helpful resource, which I wished I had access to when I started my first company
If it helps someone avoid learning this the hard way, it did its job
💯
Great framework. In my experience, getting people to understand LTV/CAC makes all the difference in understanding operating costs
Once LTV & CAC clicks, operating decisions suddenly make a lot more sense
Simple and great model Petar!
I like using time as a metric for everything
Thanks Danny. Time forces honesty, cash flow doesn’t let you hide for long
Thanks for the read Petar!
This is such an honest, uncomfortable truth.
The exciting stuff...
The vision.
The big ideas.
And the positioning.
That's the fun part.
But the numbers?
Nobody wants to sit down and face them.
And sit with the assumption that "it'll work out"?
That's where most businesses start to crumble.
Appreciate that. The uncomfortable part is usually where the real work is. Numbers don’t kill good ideas, they expose weak ones early enough to fix them