Unit Economics: Customer Acquisition Cost (CAC) and Lifetime Value (LTV) was an eye-opener!

It's easy to get swept up in a vision or story that drives you to start your venture. But at the end of the day, it all comes down to the fundamentals of business—growth and profitability. This class laid out invaluable insights, but the true game-changer? A breakdown of common mistakes entrepreneurs make with unit economics. Here are a few that stood out:

🚫 Common Pitfalls in Unit Economics:

• Relying solely on a consultant or CFO without personal engagement

• Neglecting to iterate models as new data arrives

• Using generic templates found online without customization

• Skipping proxies or comparables for real-world benchmarks

• Projecting into far-distant years (6+)

• Overlooking key assumptions

• Failing to model different scenarios (best and worst-case)

If you're building a business, ask yourself: How well do I understand my unit economics? How can I optimize for both investor expectations and my own strategic goals?

🎯 Benchmark Goals for Success:

• Weekly growth: Aim for ~7%, as favored by YC

• T2D3 Growth Model: Triple twice, then double three times

• LTV/CAC Ratio: Strive for at least 3x

• Rule of 40: Growth % + Profit % ≥ 40%

• CAC Payback: Within 12 months

Huge thanks to Professor Chuck Eesley for bringing us such an amazing class and these invaluable lessons!