🗺️ Planning

Unit economics

Lesson 4 of 8 · 6 min read

Unit economics is the question: "Does each customer make us money?" If no, more customers makes things worse, not better.

  • The two numbers:
  • CAC (Customer Acquisition Cost): all sales+marketing ÷ new customers.
  • LTV (Lifetime Value): gross profit per customer over their lifetime.

Rule of thumb: LTV/CAC > 3x and CAC payback < 12 months. Otherwise, fix it before scaling.

Financial modeling for non-finance foundersCash runway