Growth Metrics: Viral Loops, Retention & Sales Efficiency
September 2008. Dropbox had a problem. They were spending $233-388 to acquire each customer through Google AdWords. But each customer was only worth $99 (annual subscription). LTV:CAC ratio: 0.26:1 Translation: Lose money on every customer. Most companies would: Raise prices Cut acquisition costs Pivot the business Shut down Drew Houston did something different. He built a referral program: Give 500MB for each friend who signs up Friend gets 500MB too The result? ...