Why Unit Economics Matter More Than ARR
Every SaaS founder knows the big numbers, but most miss the micro-metrics that predict failure 12 months in advance.
The #1 reason SaaS startups fail? Poor unit economics masked by growing revenue.
The 6 KPIs That Matter
- CAC (Customer Acquisition Cost) — Total sales & marketing ÷ new customers
- LTV (Lifetime Value) — Average monthly GM per customer ÷ churn rate
- LTV:CAC Ratio — The gold standard: 3:1 is healthy, <1:1 is burning money
- Payback Period — Months to recover CAC (target < 12 months)
- Gross Margin % — Above 70% for most SaaS
- Monthly Churn % — Below 5% for growth-stage companies
The Template I Built
I got tired of building these from scratch every month. So I created a Google Sheets dashboard that:
- Auto-calculates all 6 KPIs from raw data
- Color-codes red/yellow/green against targets
- Includes sample data from real SaaS scenarios
- Tracks cohort retention curves
Grab the full template here: https://microtoolsb2b.gumroad.com/l/saas-unit-economics-dashboard-sheets
Quick Setup
- Copy your monthly customer/MRR data
- Paste into the Inputs tab
- Dashboard auto-updates
- Share with your board
Try it out and let me know what metrics you track!
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