The Ultimate SaaS Unit Economics Tutorial

I teach you why SaaS unit economics are so important and how to calculate the key metrics like LTV, CAC, payback period, and more.
✅ SaaS Unit Economics Template Download: mailchi.mp/ericandrewsstartup...
🚀 If you want to master the finance skills & frameworks to successfully scale technology startups, secure your spot in my "Finance for Startups" program, today: www.ericandrewsstartups.com/f...
Communities:
💼 Linkedin: / eric-andrews-1624b656
☑️ Twitter/X: / eric__andrews
🌟 Instagram: / ericandrews_startups
🔥 Discord: bit.ly/discord_eric
💻 Newsletter: bit.ly/joinericnewsletter
🎥 Clips: / @ericandrewsclips7818
Related Startup Videos:
🚩 Playlist - Finance for SaaS Startups: • Finance for SaaS Startups
🚩 7 Most Important SaaS Metrics: • 7 Most Important SaaS ...
🚩 SaaS Financial Model Tutorial: • SaaS Financial Model T...
▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬
In this video, we learn about the definition of unit economics for SaaS, all of the metrics that fall into this category, and then I walk you through how to calculate each different unit economics metric through an example-based finance case study.
We calculate customer lifetime value, customer acquisition costs, LTV: CAC ratios (plus benchmarks), CAC payback period (plus benchmarks), and more, with lots of discussions along the way to help you navigate the nuances of different SaaS startups.
Sections:
0:31 lesson agenda - definitions, unit economics components, and metrics calculations
1:08 what are SaaS unit economics and why do they matter?
2:19 components of SaaS unit economics (most important metrics)
3:58 how to calculate the customer lifetime value for SaaS including software implementation fees
9:45 how to calculate customer acquisition cost for SaaS
12:22 how to calculate LTV: CAC ratio for SaaS plus benchmarks
14:45 how to calculate CAC payback period for SaaS plus benchmarks
If you have questions - leave a comment below and I'll try to help. Cheers!
#uniteconomics #saas #startups #ltv #cac

[@eric_andrews]

Questions? Let me know in the comments happy to discuss.

[@peterokon7666]

Ppppp

[@yaminyushwe3047]

Thank you for sharing. Love all of ur contents. ❤️

[@BodhiTheMovieMaker]

Fantastic! Love the production quality of your vids!

[@eric_andrews]

Appreciate that!!

[@DimitriGaldava-yi1rz]

Amazing breakdown and explanation. Always a pleasure listening and watching

[@eric_andrews]

Glad it was helpful 🙌

[@facundogroisman6653]

Thanks for your content Eric ❤ It is amazing and helpful for all of the community

[@eric_andrews]

I'm really glad to hear that 🙌

[@user-lx2zu1qi1f]

@@eric_andrewsi can make your videos more attractive and impressive u will like my service you need to improve your editing its should eye catching

[@danielhartjes2479]

Great video, very informative. Thank you!

[@eric_andrews]

You are very welcome!

[@mor_gainz]

I love your content! But in 2024 I think you need to spend some cap ex and invest in a dynamic microphone and some acoustic panels for the walls.

[@eric_andrews]

Agreed, actually buying a couple upgrades right now as 2024 will be a big year of new content for me. Cheers

[@TheBusinessHandyMan]

As somebody who is intrested in startups this definetly helps me on my journey.

[@eric_andrews]

Glad to hear it 🙌

[@pjnyc8276]

Great video

[@eric_andrews]

Appreciate that

[@DineshBabuSundaram]

You are doing great buddy. Keep it up and post more useful video to get more organic growth.

[@eric_andrews]

Appreciate it! Working on it 😎

[@DataDrivenDecisions]

What if I told you that there is a solution that allows you to find the optimal configuration of metrics, at which you achieve the target business values? and it works with any business model. interesting?

[@emeric4579]

You didn't consider the churn rate when calculating the CAC payback period. Is it normal?
Love your content!

[@eric_andrews]

Now THAT'S what I like to hear, you are correct and I'm glad you watched the payback video !! Using churn is better than how I showed in this video

[@emeric4579]

@@eric_andrews Thank you! I'm learning from the best haha

[@eric_andrews]

@emeric4579 glad to hear it, keep it up, and you'll know more than 99% of people in no time

[@Muhassab]

Should the headcount cost be included in CAC? Like salaries for sales team and commission? And Thank you, you break it down in a way its so easy to understand. Appreciate you

[@eric_andrews]

Sure - usually sales & marketing, yes you should include for b2b saas. Everyone else, no.

[@Muhassab]

@@eric_andrews Thank you Eric. Appreciate it

[@shahasarthouse1472]

Hi bro, can you discuss unit economics and ways to reduce costs of making a loan process?

[@eric_andrews]

Hi - can you be a little more specific? Unit economics refers primarily to your per-customer economics (customer retention, lifetime value, CAC, payback periods, gross profit, etc), were you asked for them in a loan process?

[@cdnsilverdaddy]

what are those terms? SasAm LTC, CAC, payback period etc?

[@eric_andrews]

SaaS = software as a service
LTV = customer lifetime value, lifetime profit you make from a customer
CAC= customer acquisition cost, marketing cost to get 1 new customer
Payback period = how long it takes for a customer to pay for its own marketing cost (CAC), the CAC payback period. After you pay back the CAC, you start making a profit on the customer.

[@akramali6574]

❤❤

[@user-tk8dc5dl6f]

Try to speak a little slow buddy.

[@eric_andrews]

You can always reduce the playback speed to 0.75 or 0.5 if I'm going too fast