Unit Economics

Unit economics analyzes revenue and costs at the individual customer or transaction level. Key metrics include Customer Acquisition Cost (CAC), Lifetime Value (LTV), payback period, and LTV:CAC ratio. These metrics determine whether a business can scale profitably. A company growing fast with broken unit economics is burning cash toward failure. Understanding LTV:CAC ratios, contribution margins, and payback periods is essential for product managers, growth leaders, and anyone in SaaS or marketplace businesses.