Why Your CAC Isn’t Zero (and How to Properly Attribute It)

In partnership with

SDS 059: Why Your CAC Isn’t Zero (and How to Properly Attribute It)

Hey! thank you for reading issue 059 of Startup Definition Sunday (SDS). You can read past issues here.

SDS is the only newsletter that is redefining support for Africa's emerging founders. Every other Sunday, we cut through the fundraising and ecosystem noise to bring actionable insights to 2K+ emerging founders.

Introducing Jasiel & Friends: Your Exclusive Access to Africa’s Future Trailblazers

I’m excited to be working on my new paid newsletter, Jasiel & Friends (J&F), launching in just 7 weeks!

If you’ve ever wondered what the next generation of African changemakers is thinking, building, and dreaming about – this is for you.

For just $1/month, you’ll unlock:

• Bi-weekly deep dives into candid conversations with my closest friends and peers who are shaping Africa’s future – from entrepreneurs to innovators you haven’t heard of yet but need to know.

• AI-enhanced storytelling: I use cutting-edge AI tools to transform real Zoom call conversations into polished, narrative-driven newsletters – making it easy for you to access the most valuable insights of the next generation of African changemakers.

Why J&F?
This newsletter captures the real voices and inspiring perspectives of Africa’s future trailblazers – with technology helping to amplify and deliver their stories straight to you.

👉 Reserve your spot today for less than the cost of your favorite coffee: Subscribe Now

Let’s explore the future of Africa, together.

Thanks to the folks at Gamma for sponsoring today’s issue.

Love the newsletter?

I would appreciate it if you click on our sponsor's ad below to help keep it free for emerging founders like you. Thank you for your support.*

The future of presentations, powered by AI

Gamma is a modern alternative to slides, powered by AI. Create beautiful and engaging presentations in minutes. Try it free today.

If you’d like to sponsor future issues of SDS, here’s a simple way to do it.

Whenever founders pitch their company, there is a common misconception I hear all the time: “Our CAC is basically zero.” If you’ve ever told yourself this, I’m here to challenge that belief. While it might be comforting to think that acquiring customers isn’t costing you much, the truth is often more nuanced—your CAC (Customer Acquisition Cost) isn’t negligible; it’s just being improperly attributed.

Here are 3 actionable insights to help you properly attribute CAC, so you can truly understand your acquisition costs and optimize your growth strategy:

1. Account for Time as a Cost

If you’re an early-stage founder, chances are you’re doing a lot of the acquisition work yourself. Whether it’s sending cold emails, running social media campaigns, or hopping on calls, your time isn’t free—it has an opportunity cost.

To properly attribute CAC, calculate the hours spent acquiring customers and assign a dollar value to your time (e.g., your hourly rate or a market equivalent). Add that to the cost of any tools or software you’re using for outreach. This gives you a clearer picture of what it truly takes to onboard each customer.

Actionable Step: Track your time spent on acquisition activities for one week. Use a time-tracking tool like Clockify or Toggl and multiply your hours by your hourly rate. Incorporate this into your CAC calculations.

2. Map All Channels and Assign Weight

Often, founders focus on one visible channel (e.g., referrals) and ignore the supporting ones (e.g., content marketing, paid ads). If you’re running multiple acquisition strategies, each plays a role in influencing customer decisions, even indirectly.

To attribute your CAC accurately, break it down by channel. For instance, did a blog post drive traffic that led to a referral? Did a paid ad warm up a lead before they converted organically? Tools like Google Analytics or attribution software (e.g., HubSpot, Mixpanel) can help track where your leads are coming from and what influenced their decisions.

Actionable Step: Set up UTM parameters for your marketing efforts and track conversions by channel. Create a pie chart to visualize which channels are pulling their weight.

3. Don’t Forget Retargeting Costs

It’s rare for a customer to convert on their first interaction with your brand. Often, it takes multiple touchpoints—email follow-ups, retargeting ads, or content exposure—before they make a decision. These touchpoints aren’t free, and they’re part of your CAC.

For example, if you’re spending $100 on retargeting ads that bring in 10 customers, that’s a $10 CAC per customer just from retargeting. Add this to your total acquisition costs to get a complete picture.

Actionable Step: Review your retargeting spend and conversion rates. Calculate how much of your total CAC comes from nurturing leads and adjust your budget allocation accordingly.

My Two Pesewas

Misattributing CAC can lull you into a false sense of security, making it hard to scale sustainably. By understanding the true costs of acquisition across all channels, you’ll have the data needed to double down on what works and fix what doesn’t.

If you found this helpful, share this newsletter with a fellow founder who might still think their CAC is “zero.” Let’s help other founders grow smarter and faster.

That's all for today. As always, thank you for being an engaged reader. Let me know your thoughts on this issue. I’d love to hear your experiences or tips on navigating tough decisions in leadership.

Until next time,

Jasiel

Find me on X, LinkedIn or Book a 1:1 Call

Whenever you are ready, there are 3 ways I can help you:

1. Review your deck for investment: It takes less than 5 minutes to complete.

2. Improve your investor updates using these two templates.

3. Promote your brand to 1000+ early-stage and aspiring founders by sponsoring this newsletter.

^{*Ads are paid placements and not endorsements; we are not responsible for any actions or outcomes resulting from clicking or engaging with them.}