True, but even if you got $200 in NPV in five years (maybe $300 of nominal dollars), you still wouldn't be able to spin up fast enough and would take a massive infusion of capital to scale.
> $200 in NPV in five years (maybe $300 of nominal dollars),
I doubt that $300 in five years is worth $200 to a startup today - that's a very low interest rate.
> you still wouldn't be able to spin up fast enough and would take a massive infusion of capital to scale.
I was unclear about the reason for using NPV.
There are three numbers. One is the LTV of the customer. The second is the amount of money per customer that you need now. The third is the interest that someone will charge you in return for the LTV of that customer. The LTV and the interest rate tell you how much money that customer is actually worth now to you; it's the realizable NPV. If it's greater than the CAC, great. If it's less, you're hosed.
For most startups, the interest rate is pretty high, so a $200 LTV five years out isn't going to get you very much money. For example, I doubt that many start ups can get $200 today for $300 in five years.
