What is CAC?
Customer Acquisition Cost (CAC) is the average amount of money you spend to acquire one new paying customer.
CAC = Total Sales & Marketing Spend / New Customers Acquired
Example: You spent $1,200 on ads this month and acquired 30 new customers.
CAC = $1,200 / 30 = $40 per customer
CAC for Bootstrapped Indie Hackers
Most indie hackers have near-zero paid acquisition costs early on — you're getting customers through product hunt launches, Twitter, word of mouth, or SEO. But that doesn't mean your CAC is $0.
Your time has value. If you spend 20 hours/month on content and social media and acquired 10 customers, your real CAC is at least 20 hours × your hourly value.
More importantly, as you try to scale, you'll eventually need paid channels — and knowing your LTV in advance tells you the maximum you can spend.
CAC Payback Period
A closely related metric: how many months of subscription revenue does it take to recover your CAC?
CAC Payback Period = CAC / ARPU
Example: CAC of $120, ARPU of $30/month.
CAC Payback = $120 / $30 = 4 months
Benchmarks:
- < 6 months: Excellent — fast payback, can reinvest quickly
- 6–12 months: Good for most indie SaaS
- 12–18 months: Acceptable for higher-value B2B products
- > 18 months: Risky for bootstrapped builders without outside capital
Organic vs Paid CAC
Many indie hackers have two effective CAC numbers:
- Organic CAC: cost of content, SEO, community, build-in-public efforts
- Paid CAC: cost of ads, sponsorships, paid placements
The goal is to keep organic CAC low and use paid channels to scale what's already working — not to use paid as a crutch before finding product-market fit.
The LTV:CAC Relationship
CAC is only meaningful relative to LTV. A $200 CAC is great if LTV is $1,500. It's catastrophic if LTV is $120.
The healthiest indie SaaS businesses optimize both simultaneously:
- Drive down CAC through SEO, word of mouth, and community
- Drive up LTV through retention and expansion revenue