The Daily Founder Day 026: Unit Economics

2024-03-07

As a founder, questions like: How do I acquire customers? How much should I spend on marketing? Am I actually making money? are central to the journey and you gotta be confident in anwering them. Enter Unit Economics. Think of unit economics as the profitability of a single customer acquisition, product sale, or any core unit within your business model. It's about understanding the revenue generated by this unit and the costs associated with acquiring and...

As a founder, questions like:

How do I acquire customers?
How much should I spend on marketing?
Am I actually making money?

are central to the journey and you gotta be confident in anwering them.

Enter Unit Economics.

Think of unit economics as the profitability of a single customer acquisition, product sale, or any core unit within your business model. It's about understanding the revenue generated by this unit and the costs associated with acquiring and serving it. Breaking it all down to these units will give you key metrics like ARPU (Average Revenue Per Unit), CAC (Customer Acquisitions Cost), and CLTV (Customer Lifetime Value)

By understanding and optimizing your unit economics you can make informed decisions, ensure your business is financially sound, and ultimately, achieve sustainable growth.

So for today, figure out or check in with your unit economics and calculate your ARPU, CAC & CLTV.

Happy number crunching. Let’s do this!

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