Would You Invest?
Growth looks impressive at company level. Unit economics reveal what each new customer adds—or subtracts.
Which company would you invest in?
Use only the information shown.
10,000 customers
CAC $80 · first-year gross profit $60 · annual churn 70%
4,000 customers
CAC $120 · first-year gross profit $180 · annual churn 15%
The unit is the repeated economic event
Unit economics ask what happens each time the business acquires and serves one more customer, order, trip, seat, or account.
Four numbers to connect
No single number is enough.
Cost to acquire
Sales + marketing cost per new customer.
Value retained
Revenue minus direct cost to serve.
How long value continues
Who stays and who leaves.
Time to recover CAC
How long cash is at risk.
The business model changes what must be measured
The same revenue number can come from very different economics.
Fix the unit economics
A subscription company has the baseline below. Choose the two changes that create the strongest durable improvement.
Cut CAC 10%
Raise price $5; churn may rise 1 point
Reduce churn from 8% to 6%
Raise gross margin from 60% to 67%
Double ad spend; CAC rises 20%
Add annual prepay at 15% discount
Small metric changes can produce large model changes
The strongest lever depends on what causes the current weakness.
Retention + margin improve the unit repeatedly
Reducing churn and improving gross margin increase value from existing customers rather than relying on more acquisition.
More customers survive each month.
More value remains from every active customer.
Does every new customer create value?
Growth is healthy only when the repeatable unit is healthy.