saas-economics-efficiency-metrics

SKILL.md

Evaluate SaaS unit economics and capital efficiency to determine if your business model can scale sustainably.

Covers 15+ metrics across unit economics (CAC, LTV, payback, gross margin), capital efficiency (burn rate, runway, Rule of 40), and GTM performance (magic number, operating leverage)

Includes segment-specific analysis templates and quality checks for each metric to catch common pitfalls like high LTV:CAC ratios masking poor payback periods

Designed for PMs to make scaling decisions: when to prioritize growth vs. profitability, which channels to invest in, and whether unit economics support acquisition spending

Provides worked examples of healthy models, cash traps, and negative operating leverage scenarios with specific corrective actions

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