saas-economics-efficiency-metrics
Purpose
Determine whether your SaaS business model is fundamentally viable and capital-efficient. Use this to calculate unit economics, assess profitability, manage cash runway, and decide when to scale vs. optimize. Essential for fundraising, board reporting, and making smart investment trade-offs.
This is not a finance reporting tool—it's a framework for PMs to understand whether the business can sustain growth, when to prioritize efficiency over growth, and which investments have positive returns.
Key Concepts
Unit Economics Family
Metrics that measure profitability at the customer level—the foundation of sustainable SaaS.
Gross Margin — Percentage of revenue remaining after direct costs (COGS).
- Why PMs care: A feature that generates $1M revenue at 80% margin is worth far more than $1M at 30% margin. Margin determines which features to prioritize.
- Formula:
(Revenue - COGS) / Revenue × 100 - COGS includes: Hosting, infrastructure, payment processing, customer onboarding costs
- Benchmark: SaaS 70-85% good; <60% concerning
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