Table of contents
- The scaling paradox
- Marginal CAC vs blended CAC
- When to stop scaling
- FAQs
The scaling paradox
Doubling ad spend does not double revenue. It might grow it 50%. At which point your marginal CAC has doubled, your marginal CM has crashed, and every incremental order is losing you money — even if the average is fine.
This is why founders scale into losses without seeing it.
Marginal CAC vs blended CAC
Your blended CAC is the average. Your marginal CAC is the last rupee spent. When marginal CAC exceeds LTV, stop. Even if blended CAC still looks okay.
When to stop scaling
- Marginal CAC > 90-day LTV → stop scaling that channel
- CM at scale < CM at current level → dial back until CM recovers
- MER dropping 3 weeks in a row → audit funnel before pushing spend
FAQs
Q: Should I ever cut spend?
Yes. Cutting spend to profitable levels often increases profit dramatically.