financial-unit-economics_skill

Overview

This skill analyzes profitability at the unit level—per customer, product, or transaction—to determine whether a business model is viable and scalable. It helps calculate CAC, LTV, contribution margin, payback period and interprets those metrics to guide pricing, marketing, and growth decisions. Use it to validate startup metrics and present clear evidence of economic viability to stakeholders.

How this skill works

The skill defines the unit of analysis and computes fully-loaded CAC and cohort-based LTV using observed retention or churn. It calculates contribution margin, LTV/CAC ratio and payback period, then segments results by channel or cohort to reveal where economics work or fail. Final outputs include a concise analysis, cohort retention tables, channel profitability and targeted recommendations.

When to use it

• Validating a new product or startup before scaling
• Setting or testing pricing to reach target margins
• Assessing marketing channel ROI and optimizing CAC
• Deciding whether to raise funding or increase ad spend
• Prioritizing product or retention improvements to boost LTV
• Preparing investor materials showing unit-level economics

Best practices

• Define the unit clearly (customer, SKU, transaction) and use cohort windows consistently
• Include fully-loaded acquisition costs (sales salaries, tools, overhead allocations) when computing CAC
• Base LTV on cohort retention curves and conservative time horizons, not optimistic guesses
• Break down CAC and LTV by channel and segment; blended metrics can hide failing channels
• Track payback period alongside LTV/CAC—both affect cash flow and scaling decisions
• Recalculate unit economics regularly as product, pricing, or channels change

Example use cases

• SaaS: compute ARPU × gross margin ÷ churn to evaluate LTV and decide on ad spend limits
• E-commerce: model AOV, repeat rate and contribution margin to test promotions and loyalty programs
• Marketplace: measure GMV × take rate by side to assess incentives and liquidity investments
• Freemium product: calculate blended LTV including free-user costs and conversion lift targets
• Enterprise sales: include sales team costs to assess CAC and determine acceptable sales cycle length