Jamie Sullivan

Sep 7, 2023 | a16z.com | Alex Immerman |Jamie Sullivan |Sarah Wang |David George

The internet opened up a major consumer market by providing services more cheaply, and to more people, online. Now, AI is kicking off a colossal wave of opportunities for startups by making it possible to build scalable online experiences that replicate the benefits of being in person. Having a highly personalized experience is what consumers value the most about in-person services—think of tutors, personal trainers, and doctors.

Aug 22, 2023 | a16z.com | Jamie Sullivan |Alex Immerman

To put it simply: higher LTV:CAC → higher margins → higher valuation. Investors often use 3x LTV:CAC as a rough benchmark of a consumer company’s financial health. If your customer lifetime value (LTV) is 3 or more times your customer acquisition cost (CAC) within 5 years, that means your company has efficient returns on sales and marketing spend. But there’s little discussion of how a higher LTV:CAC actually translates to long-term profitability and, ultimately, valuation.

Aug 22, 2023 | a16z.com | Jamie Sullivan |Alex Immerman |David George |Sarah Wang

To put it simply: higher LTV:CAC → higher margins → higher valuation. Investors often use 3x LTV:CAC as a rough benchmark of a consumer company’s financial health. If your customer lifetime value (LTV) is 3 or more times your customer acquisition cost (CAC) within 5 years, that means your company has efficient returns on sales and marketing spend. But there’s little discussion of how a higher LTV:CAC actually translates to long-term profitability and, ultimately, valuation.

Aug 11, 2023 | a16z.com | Peter Lauten |David George |Jamie Sullivan |Alex Immerman

When a platform shift reshapes the technology landscape, who wins? From mainframes to PCs, desktop to mobile, unnetworked to internet, and on-prem to cloud and SaaS, technical progress in software tends to follow Schumpeter’s creative destruction: new winners emerge with new eras. As our partners Martin Casado and Sarah Wang recently explored, this dynamic is finally starting to play out in AI.