I don't know exactly why the industry has settled on a best practice of specifically 3:1. Good question.
My hunch is it has to do with the opportunity cost of investors. If a startup comes to an investor with a 1.1:1 ratio why would a rational investor invest? They can get that rate of return in less risky asset classes.
As a bootstrapper yes a lower LTV:CAC ratio could in theory be fine. But I would think like an investor. Instead of investing money you are investing your time. It would be better to iterate and tune what you're doing until you're getting a higher return on your time than you would working in a corporate job you could get or, if you do have capital, a higher return than you would get investing in less risky asset classes.
To your point, time to recover CAC is extremely important to bootstrappers. I recommending going after a niche in your market that can afford higher ticket pricing and will jump at annual deals in exchange for (say a 2 month) discount so that CAC is recovered in month 1. This is very doable but requires sales skills which many technical founders don't have. But they are very capable of mastering.
My hunch is it has to do with the opportunity cost of investors. If a startup comes to an investor with a 1.1:1 ratio why would a rational investor invest? They can get that rate of return in less risky asset classes.
As a bootstrapper yes a lower LTV:CAC ratio could in theory be fine. But I would think like an investor. Instead of investing money you are investing your time. It would be better to iterate and tune what you're doing until you're getting a higher return on your time than you would working in a corporate job you could get or, if you do have capital, a higher return than you would get investing in less risky asset classes.
To your point, time to recover CAC is extremely important to bootstrappers. I recommending going after a niche in your market that can afford higher ticket pricing and will jump at annual deals in exchange for (say a 2 month) discount so that CAC is recovered in month 1. This is very doable but requires sales skills which many technical founders don't have. But they are very capable of mastering.