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Tren Griffin addresses sales strategies involving tokens, stating that selling them at a significant discount to cost of goods sold (COGS) or distributing them freely to fill a sales funnel, which later converts to paid subscriptions at a low single-digit rate, should be viewed as paid marketing or customer acquisition cost (CAC).
Griffin highlights the financial implications of such promotional tactics, emphasizing that these practices effectively turn discounted tokens into a form of marketing expenditure rather than traditional revenue.
Griffin’s perspective on token-based customer acquisition costs aligns with his previously articulated views on sustainable business strategy, particularly regarding Berkshire Hathaway’s focus on capital allocation grounded in integrity and durable advantages. In a similar vein, his commentary also intersects with concerns about how increased burn rates can heighten risk when scaling efforts lack underlying model improvement, highlighting the importance of disciplined financial practices amid evolving sales tactics.