Business model economics is all about ensuring your startup is scalable, efficient, and profitable. It's a framework investors use to gauge if every customer or purchase will eventually turn a profit. Here's how different industries look at it:

🤖 Technology business metrics

• CAC payback period: Measures how quickly you recoup the cost of acquiring a customer.

• LTV/CAC ratio: Compares the lifetime value of a customer to the cost of acquiring them. A higher ratio indicates better profitability.

👽 E-commerce business metrics

• Gross margins: The difference between revenue and the cost of goods sold.

• CAC vs. average order value: Balances the cost to acquire a customer against the average amount they spend per order.

👻 Key metric: CAC payback

One of the simplest and most critical metrics is the CAC payback period. This measures how quickly you recover the investment spent on acquiring a user and how much you can eventually earn from that user.

👣 Steps to calculate and present key metrics:

For revenue-generating startups: Calculate and present key metrics like CAC, LTV, and gross margins. If they aren't attractive yet, outline a strategy for improvement.

For pre-seed startups: Even if you're not generating revenue, estimate your customer acquisition cost and expected earnings. Show that you understand these metrics and have a plan.