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💎 CAC/LTV ratio in combination with revenue
A lot of times, business health and growth can be at odds with each other because you can trade health for more growth. Looking at the CAC/LTV ratio in combination with Revenue is healthy because it considers both. It also gives you a common reference across the whole business.
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💎 The throughput funnel
The throughput funnel for a team is a function of:
- Velocity: how many feature experiences are you putting out per engineer per week? Example at Airbnb: 1 test/engineer per week.
- Success rate: for 100 experiments, how many are a statistically significant winner that you’re going to roll out? A good benchmark is a 20-30% success rate
- Average Impact: if you have a 30% success rate, what’s the average impact over these? A more established company like FB might have a +1% average impact that drives a lot of revenue. More earlier stage companies should have a much higher average impact.
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CURATED BY
⛏️ 💎 Mining Best-in-class Mobile Growth Insights @ GrowthGems.co / Product Growth & Mobile Marketing @ Babbel Love learning and getting better at it. Stay savvy!
Gems on fundamentals about revenue growth and testing by an expert from MasterClass.
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