Business Metrics
Unit Economics
The direct revenues and costs associated with a particular business unit—typically the profit or loss from acquiring and serving a single customer. The fundamental building block of business profitability.
Biological Context
Unit economics parallels individual energy budgets: the energy gained from food versus the energy spent acquiring it. Just as organisms need positive energy balance to survive, businesses need positive unit economics. Scale amplifies unit economics—good or bad.
Business Application
Good unit economics mean you make money on each customer; scale then brings profits. Bad unit economics mean you lose money on each customer; scale then brings faster death. Fix unit economics before scaling.