Each project arrives with its purpose, milestones and first tasks written out. Here is how the first three read.
Defining the unit your business sells
Unit economics only mean something once you know what one unit is: a customer account, a seat, an order, a booking or a device. Founders who switch between these mid-model end up comparing a per-order cost with a per-customer revenue and never notice. Picking the unit first, in writing, makes every later number comparable.
First tasks
- List every way revenue arrives today or is expected to arrive
- Write which costs rise with each candidate unit
- Choose the primary unit and write why in one sentence
- Agree the unit with your co-founder before building the model
Fixed formulas for CAC, LTV and margin
CAC, lifetime value, gross margin, contribution margin and payback each have several common definitions, and investors will ask which one you used. Writing one formula for each, with what is included and excluded, stops the numbers quietly changing shape from month to month.
First tasks
- Write a draft formula for each of the five core metrics
- List what each formula includes and what it leaves out
- Define blended CAC and paid CAC as separate lines
- Link the glossary from the first tab of the model
Napkin unit economics in one page
Before any spreadsheet, a founder should be able to say roughly what a customer pays, what it costs to serve them, how long they stay and what it takes to win one. Ten minutes of arithmetic often reveals that a plan needs ten times the retention or half the CAC to work, which is better known now than after a year of building.
First tasks
- Write your best guess for price, variable cost, lifetime and CAC
- Work out contribution per customer and the LTV to CAC ratio
- Circle the input that breaks the business if it is wrong
- Date the page and file it as version one of the model
