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Unit Economics For Founders Textbook

A free, self-paced textbook in 6 chapters. Read a chapter, then drill it with the 120 companion flashcards using spaced repetition.

6 chapters · 120 cards · Updated

Chapters

  1. 1Foundations of Unit Economics

    Unit economics is the revenue and costs directly attributable to a single unit of value — a customer, an order, a subscription month, or a contract — used to assess per-unit profit...

  2. 2The CAC-LTV-Payback Math

    Customer Acquisition Cost (CAC) is the fully-loaded cost to acquire one new paying customer — ad spend, sales salaries, tools, and creative, divided by new customers in the period....

  3. 3Retention, Churn, and Cohort Mechanics

    A cohort is a group of users sharing a defined start event — for example, customers acquired in January 2025 — tracked over time to measure behavior. Cohort analysis is central to...

  4. 4Sales Efficiency and Growth Health Metrics

    A small set of compounding metrics separates efficient growth from capital-hemorrhaging growth. The Burn Multiple, popularized by David Sacks in a 2020 tweet-thread framing it as "...

  5. 5Pricing Models and Freemium Economics

    Recurring-revenue businesses revolve around a few core top-line metrics. Annual Recurring Revenue (ARR) is the annualized value of all recurring contracts at a point in time — the...

  6. 6Acquisition Channels, Marketplaces, and Customer Risk

    Acquisition channels each carry distinct unit-economic profiles. Content and SEO carry high upfront fixed cost with near-zero marginal CAC per lead and long payback — great at scal...

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