Unit Economics

“If you're selling a 100,000 dollar deal and you're pulling a Ford deploy, like your economics are, it's going to get messy.”

“You want to make sure that the ACV that you're going after, it has to top the hurdle, right? In, in other words, you look at your unit economics and is it healthy or not? You don't want to be taking deals that are, you know, negative to your unit economics. Bu…”

“Every VC wants to see profitable unit economics, but the vast majority of companies they invest in don't understand their unit economics until way after the investors have given them the money.”

“I look at the like landscape of AI companies that I've seen, and I think you have to have a really durable, interesting insight that gives you a shot at viable unit economics to be an interesting business. And that is going to kill off 80 or 90% of the stuff t…”

“The unit economics in most of those cases that you mentioned is pretty, pretty poor, but I think the strategy is that yes, one, the models will optimize in cost, and then two, they will be the brands that customers trust, and then they can actually use a lot o…”

“The administration for e-commerce is just Absolutely crazy, and that's where a lot of my e-commerce ventures have gone to die, but everything coming together, it was one of those ideas that if it worked, And we started a new trend and don't get me wrong. We…”

“Is it logical to calculate unit economics? The answer is no, not really at that point. But once you get past 10, 15 paying customers, you're approaching a million in recurring revenue, then it does become useful and important to calculate them.”

“Remember, in your first few sales you're optimizing for learning, Not unit economics.”

“You're going to have higher burn rates. And so you're going to know less about your unit economics, just by a natural fact, because you get further away when you're operating that way. And you can't raise four hundred million dollars and not have a high burn r…”

“I think so many PMs come in with a point of view of like the product and the target market, but like don't actually understand the underlying mechanisms of how we make money and what our unit economics are and how that could be improved. And the candidates tha…”

“I mean, product market fit, scaling product market fit, unit economics, scaling unit economics. I think those are all four different steps in my opinion. So I actually think that it is, ah, you can get to product market fit, but you may not be able to scale it…”

“When we had to readjust our unit economics, we had to increase prices. We did it in 20, 21, and the impact was minimal.”

“But if it was harder to get that doubling than you thought, or it costs you more to get that doubling than you thought, or your manufacturing costs went up, or the margins weren't there, you know, in that doubling, you're actually generating anti-proof of the …”

“Frequently, you have to scale first and figure out your unit economics later. In fact, putting off this question is the prudent route for anyone playing in a winner-takes-all market.”

“There are things where I think you have like magical thinking around unit economics. You're like, well, when we get to the scale of X, it's all going to work out. We can make these things happen. I think you actually need to really make sure the unit economics…”

“Poor unit economics mean you're always relying on the next investor and ultimately the greater fool.”

“Most VCs actually don't focus on the unit economics, especially pre-launch.”

“I believe that we have to tackle our customer retention and success first, then focus on unit economics, not do them at the same time.”

“The unit economics end up being sort of table stakes, right? Like you could get it wrong to the downside. It's very rare that the company ends up with, you know, unit economics that are much greater than what you expected. It's much more common that, Hey, the …”

“The thing is that one of the big mistakes we've done in the history of the company is basically we started scaling before we fully nailed our unit economics. And in a way we kind of woke up too late for that. And we dedicated 20 20 into fixing that.”

“I think with D one, a lot of this is like, how do you build a great business? So forget a great product and a great team, but flash forward a few years, how do you think about the financial innards that will actually make the unit economics The performance. Gr…”

“There's a thing called the just world hypothesis, and in the end, unit economics drive P&Ls. And if your business is built on a house of cards, and your unit economics don't make any sense, in the end, your business will not succeed. And that competitor, albei…”

“Growth is almost always going to be most important, predicated on the fact that, you know, this is a healthy business and one where the math works.”

“The fact that we were trained on a shoestring with no money to fund the business from the get go, the bones of the business and the unit economics and the margins and everything were really, really good and built well because they had to be in the early days b…”

“So saying this slightly differently, you might have two companies They're both losing money, but one where the economics are fantastic, and you want them to lose money because they're engaging in NPV positive investments. Another company losing money that's ac…”

“You don't have unit economics. The CAC is going to explode, or you don't know where it's going to go. The LTV is going to shrink. We just don't know.”

“I think it's, you cannot take it literally on what the unit economics are, but I think you start to see some leading indicators on, you know, the idea of market pull that I talked about.”

“The growth investors, what they do is they talk about CAC and LTV and unit economics. Look, that stuff is super valuable. It's just not valuable in those first 18 to 24 months when the entrepreneur is trying to turn that idea into something real.”

“So if this is a heavy paid marketing business, it's probably the case that those economists are going to degrade over time because, you know, your cost of acquisition, you know, through Google and Facebook and other paid channels may be difficult.”

“You know, in the early days, I think unit economics, it's important that you're kind of in the right ballpark. So if it takes you a million dollars to acquire a customer that brings you 10,000 in revenue, like that's not good. But if it costs you 5000 dollars …”

“The big lie is fundamentally around unit economics. What I see out there in the market is people, they go out and they prove product market fit, right? They have a product or they have some business model innovation and it's going to work. The next question is…”

“At the end of the day, I think everyone's just going to keep accepting this big lie, because as long as markets still appreciate size over return, they're going to continue to support these types of companies. And if you look at it, proof is in the pudding. Th…”

“If you've already worked out your unit economics and you, you've become profitable, then, you know, you have a little bit more leverage to have, you know, I feel like a faster, ah, fundraise process.”

“So, I really challenge folks, and I wish we thought about this at HubSpot in the early days, to think about customer success, then unit economics, and then growth.”

“If you're creating a new user behavior, it can be unit economics inefficient for some time.”

“There is extremely high density in China, and density allows for new business opportunities. For example, take all the online to offline companies out there, whether it's on-demand delivery of food, floral arrangements, masseuses. These things can have great u…”

“The CAC is 2600 bucks, the ASP is 4600 bucks, so we make two grand on every sale right at day one.”

“And the challenge is when you add an infrastructure of local delivery people, the unit economics can get very, very challenging. And so you end up either in a situation where you have to charge a significant premium to what the goods normally cost, in which ca…”

“If you focus too soon on the unit economics, you may never get to the scale and the growth that you need for that engine to actually continue on its own.”