Customer acquisition cost (CAC) for traditional enterprise software companies vs crypto companies
Typical enterprise software companies spend approximately 7-15% of their enterprise value on customer acquisition. L1 Web3 companies spend 29-95%.
The comparison between web2 and web3 is stark, 3-7x higher CAC relative to corporate value. Even if the estimates are off by a factor of 2 or more, this math suggests crypto companies acquire customers less efficiently than their older brothers.
It also suggests future token cap tables may not be so community focused in the future, a phenomenon we’ve already observed in L1 token allocations.
In all fairness, the web2/3 CAC comparison is somewhat clementines and satsumas for a few reasons.
– equity and tokens are different instruments
– web2 companies have been highly optimized after two decades of refinement
– the valuation frameworks between web2 & web3 companies aren’t identical
– this calculation doesn’t include testnet incentives
– it excludes ecosystem funds raised by cryptocos to develop their ecosystems
Nevertheless, the concept of CAC will permeate crypto go-to-market strategies at some point.
But not today. I haven’t met a crypto company that talks about CAC. Or sales and marketing spend. Or ROI. It’s too early in the development of the ecosystem for most businesses to concentrate on customer acquisition funnel optimization.