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Comment by rcarrigan87 | Hacker News Reader

High acquisition cost, low margin businesses are really hard. This is why it'll take another decade to dethrone craigslist.

All these businesses are great ideas with great solutions, the problem comes down to an unsustainable acquisition model.

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Or in other words a bad idea. An idea is not a good idea if your LCV is less than your CAC. Please when you see a gap in the market investigate why there is a gap. It is possible that you are a genius that can see things that no one else can, but also consider that you are walking into a death trap.

LCV = Lifetime Customer Value?

CAC = Customer Acquisition Cost?

Yes :) These are the two key numbers you need to know to know if your business is on the track to success or failure.

That's one way of looking at it. I guess my point was more, understand your real challenge is going to be acquisition costs going in and focus on that.

With that mentality, it's likely you try to have a very low burn rate and dominate one city before expanding to another.

You can tackle it either way, but keeping your costs down is certainly the smarter way to go if you are spending your own money.

The problem is investors will put pressure on you to expand as fast as possible without concern for your CAC. They don't really care if you bomb out as they are just looking for the growth rocket they can ride to the stars - if 9 out 10 blow up on the launch pad well that is just a problem for the entrepreneurs who have put their life and soul in.

Why does craigslist need to be dethroned? It's simple, works as intended, it's fast, and it's not bloated with ads. It's on top of the world for good reason.

There plenty of bigger problems to solve than a better online classifieds website.

Kijiji (a subsidiary of eBay) dethroned Craigslist in Canada a few years ago. It's more popular here, although Craigslist still exists.

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