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Unit economics. The one question.
Per-customer revenue, variable cost, contribution margin, payback. Does each customer make money?
Per customer / month
Results
Variable cost
$27
per cust / mo
Contribution margin
$93
77.5% margin
Lifetime contribution
$2,232
× 24 mo
Net lifetime
$1,782
after CAC
Benchmark
Profitable per customer
Each customer nets $1,782 over 24 months, payback in 4.8 months.
How it works.
If contribution margin is negative, growth makes the loss bigger. Fix the unit before raising more capital — capital can't subsidize a broken unit forever.
FAQ.
What are unit economics?+
Revenue and cost per customer. The basic question: does each customer make money? If yes, you have a business; if no, more customers make it worse.
What's contribution margin?+
Revenue per customer minus variable cost per customer (hosting, support, payment processing). It's the dollars-per-customer available to cover fixed costs and profit.
Unit economics vs LTV:CAC?+
Unit economics is the granular view (per customer per month). LTV:CAC summarizes unit economics across the customer lifetime. You need both views — monthly contribution drives short-term cash; LTV:CAC drives long-term valuation.
When do unit economics need to work?+
Eventually for every business. VC-funded startups can run negative unit economics for 2-3 years buying market share — but the path to positive must be visible by Series B.
Should I include CAC in unit economics?+
Some teams do (full economics), some don't (steady-state economics). Pick one and document. Excluding CAC shows whether the *product* makes money; including it shows whether the *business* does.