Jason M. Lemkin says word-of-mouth and community can generate roughly 50% of leads for free in niche markets. His company hit profitability at $5 million revenue by cutting customer acquisition costs to near zero, though scaling and raising capital create new pressures.
At $5 million in revenue.
You often will get half of your deals from not just inbound deals but folks that heard about you, folks that in your little niche, in your little niche that have not, not in the grand scheme of things, no one's heard of you but other folks just like your customers, they start talking about you. They go to events, they meet up, they have their own little communities, they talk about you. So you get like you start approaching 50% of your leads are free, you know, free in quotes, but they are free and they're inbound and they're great. And so if you did nothing else your CAC would go to zero. And frankly that's what I accidentally did as a founder. That's why I went profitable at 5 million in revenue is I just went to a zero cost marketing model. But the problem with that is right when that happens is when we start to raise money and invest in sales and marketing.
