but all of it gets around to answer the simple questions is how much a customer

worth to us and then from there we can make better decisions and so when we're looking

at companies we want to see companies with strong LTVs or the potential to have strong LTVs

so that in the future we could spend more in the acquisition and scale.

Welcome to the game where we talk about how to sell more stuff to more people in more ways

and build businesses worth owning. I'm trying to build a billion dollar thing with acquisition.com.

I always wish Baysos, Musk, and Buffett had documented their journey,

so I'm doing it for the rest of us. Please share and enjoy.

So I was talking to an entrepreneur who'd apply through acquisition.com to potentially become a portfolio company and one of the questions that I asked him on the call was,

so what's your LTV? Like how much, you know, how much you make per customer over the lifetime.

And he honestly was like, I don't know what it is.

I know I should know, blah, blah, blah.

So I'm making this to that you know one of the most important metrics

in entrepreneurship, and I'll give you three different ways you can calculate it.

So the first one and the easiest one to do this is off of lifetime. The second way to do it is off of

churn and the third way is to do it is off sales velocity all right and I'll finish

with sales velocity because it's the one that I use most frequently but all of these are good ways of getting

it and it'll give you approximations and I'll explain how each of them is calculated.

Now as a quick side note the reason that this is so important if you don't know who I am

Accusure. I own it, we portfolio it is about a hundred million dollars a year. I just make these because I like doing this

and I'm a crazy person. So if you are a growing business,

this will underestimate your LTV,

...