My book FastScaling has been launched.
It is supposed to help founders and aspiring founders get through the growth valley of death and from initial traction to sustainable high growth.
This growth handbook for founders shows a smart path to building massively valuable businesses.
The unit economics concept is a powerful tool that helps you better understand whether you pursue a viable business model. By deconstructing the unit economics and focusing on improving all underlying variables, you can also steer your business towards high growth readiness. Have the patience to develop strong unit economics. It will eventually pay off and pave the path to sustainable high growth.
How to boost growth? How to acquire more customers? How to get more traction? If you are a founder looking for answers to these questions, do not directly jump to analysing options to further fill the top of the conversion funnel. Optimise your conversion funnel first. Optimising the conversion funnel will not only lead to more customers, but also to lower customer acquisition costs, shorter payback periods, better CLV/CAC-ratios and ultimately higher growth.
While there seems to be a common understanding on how to calculate most KPIs, I see some inconsistent approaches as to calculating unit economics for platform businesses. This heterogeneity leads to confusion and unnecessary time spent discussing what the correct approach is. With this article, my co-author Richard Meyer-Forsting and I want to share some of our insights we gathered over the years and explain how we believe unit economics for a platform business need to be calculated.