💸 Unit Economics lifehacks and cases

Artem Kosarev
1 reply
Hi Product Hunt Community! Could you share with me use cases of your work with Unit Economics (when do you need it? how do you calculate it? what do you do with results) and lifehacks how to calculate it fast, accurate and effectively?  Thank you in advance!

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CEO, JetHunter
Hello @artkosarev ! Here we go again... Lol I've explained the same topic recently, so I have some useful (I hope so) tips for you below. The unit economy describes the revenues and costs of business models in relation to individual business units. A unit refers to any basic, quantifiable item that creates value for a business. In other words, unit economics tells us how much value each item generates for the business. For example, an airline might count a seat sold on a single flight to each destination, while a meal delivery company might track a single order delivered to client and one cafe might watch for tables (or seats) it accommodates daily. The definition of a "unit" differs not just within an industry but between each company. There are no strict rules here. I identify units based on the company type. For a company operating a daily routine, we might identify unit as a single element of that process that meets the following criteria: 1. "Traceable", means that each item within a business process can be tracked, counted, measured, etc. 2. "Separated", elements do not depend on each other and do not interfere with each other, rather they may be connected but retain their individual value. 3. "Consistent (or repetitive)" elements maintain the same size, proportion, design and layout throughout. If you switch units, your datasets should be updated. 4. "Low-leveled" elements contribute to the cleanest datasets. 5. "Sufficient" unit assembles enough information to analyze its own profitability. By scaling that outcome, you can evaluate business overall. In most cases if a unit is negative by design, it likely indicates a mistake is made (in most cases). The business model might not be sustainable, and it should be redesigned. Understanding unit economics can help you forecast profits since it gives you a per-unit breakdown of your company's revenue. A unit economics approach will help you optimize your product. The information can assist companies in identifying potential strategies for product optimization and determining whether marketing expenses are worthwhile. Hope that helps. Feel free to ask if I have missed anything or if you need further explanation.