Film-style poster for the Unit Economics for Mentors presentation

A guide for mentors: Unit Economics for Mentors

How to send Unit Economics, read the numbers and talk them through.

English

What this guide covers

What it is

Four numbers, two answers

Your mentee sees what one customer is worth and how fast their cost comes back.

Your numbers

Revenue per customer per month300Gross margin70%Customers lost per month5%Cost to win one customer1,500

Results

Value of one customer4,200Stays about 20 months Value to cost2.8 : 1Rule of thumb: 3 : 1 or more Cost earned back in7.1 monthsRule of thumb: within 12 months

Price 20% higher 3.4 : 1 Margin 20% higher 3.4 : 1 Churn 20% lower 3.5 : 1 Cost to win 20% lower 3.5 : 1

When to send it

Send it once sales come in

It needs real customers, even a few, to give numbers worth talking about.

Before a price change see what a higher price does
Growth without cash when sales rise but money does not
Before raising money know the numbers first

An honest frame

Rules of thumb, not laws

The 3 to 1 and 12-month lines are David Skok’s rules of thumb, not research findings.

Best guesses are fine the tool asks for them
Monthly, per customer every number on the same basis
Their lever leads they choose what to work on

Sending it

Send it from your pairing

It takes a minute, and your mentee gets an email.

Open your pairing

Choose Assign a tool and find Unit Economics.

Try it as your mentee

Enter numbers of your own first; nothing is saved or sent.

Add a short message

Ask for their real figures, even rough ones.

Open your pairing

Choose Assign a tool and find Unit Economics.

Assign a toolTool library

All Venture

Unit Economics 15 min Assumption Map 20 min Pre-mortem 15 min

Message (optional)Fill it in before Thursday. We will talk it through.

Try it as the mentee Send

Sent. You will get an email when it comes back.

Try it as your mentee

Enter numbers of your own first; nothing is saved or sent.

Unit EconomicsSaved

Step 1 of 2

PreviousNext

Before you send

Every step is filled in. Send answers

Add a short message

Ask for their real figures, even rough ones.

Tools to fill in (1)

Unit EconomicsFrom Rachel Bennett To do See all

1Open your pairing

Assign a toolTool library

All Venture

Unit Economics 15 min Assumption Map 20 min Pre-mortem 15 min

Message (optional)Fill it in before Thursday. We will talk it through.

Try it as the mentee Send

Sent. You will get an email when it comes back.

2Try it as your mentee

Unit EconomicsSaved

Step 1 of 2

PreviousNext

Before you send

Every step is filled in. Send answers

3Add a short message

Tools to fill in (1)

Unit EconomicsFrom Rachel Bennett To do See all

Reading the answers

Find the guessed number first

Each result is only as good as the weakest of the four numbers behind it.

Value to cost below 1 to 1, each customer costs more than they bring
Cost earned back in months of margin to repay winning one customer
The lever they chose compare it with the longest bar; ask why

Questions to ask

Ask, then ask once more

People who ask follow-up questions are liked more (Huang and others, 2017).

Which number is a guess? then: how could you measure it?
Which lever is cheapest to move? then: what would you try first?
What should these be in six months? then: what has to change for that?

Feedback that helps

Question the numbers, not the founder

A weak ratio is something to work on, so keep the talk on the numbers.

1 in 3 Over a third of feedback effects lowered performance in one large review Kluger and DeNisi, 1996

One step

One lever, one test this month

The tool asks how; agree one thing to try before you meet again.

94 Tests found that if-then plans help people reach their goals Gollwitzer and Sheeran, 2006

After the meeting

Keep it all on Mentornity

The numbers, your comments and the next steps stay in one place.

Read it at a glance

Value to cost and the payback time are summed up.

Add next steps

Write who tests the lever, and by when.

Ask to fill it again

Earlier answers are kept, so you can see the numbers move.

Read it at a glance

Value to cost and the payback time are summed up.

Unit EconomicsSent

At a glance

Value to cost2.8 : 1Cost earned back in7.1 months

Discussion

On: Your numbersIs the 5% churn measured or a guess? Private noteOnly you see this.

Add next steps

Write who tests the lever, and by when.

Next steps

Count cancellations for the last six months Mentee By Nov 27 Send a short exit survey example Mentor By Dec 4

Mark as discussed Ask to fill again

Earlier answers

Latest · Nov 20 Sent on Oct 2

Ask to fill it again

Earlier answers are kept, so you can see the numbers move.

Next steps

Count cancellations for the last six months Mentee By Nov 27 Send a short exit survey example Mentor By Dec 4

Mark as discussed Ask to fill again

Earlier answers

Latest · Nov 20 Sent on Oct 2

1Read it at a glance

Unit EconomicsSent

At a glance

Value to cost2.8 : 1Cost earned back in7.1 months

Discussion

On: Your numbersIs the 5% churn measured or a guess? Private noteOnly you see this.

2Add next steps

Next steps

Count cancellations for the last six months Mentee By Nov 27 Send a short exit survey example Mentor By Dec 4

Mark as discussed Ask to fill again

Earlier answers

Latest · Nov 20 Sent on Oct 2

3Ask to fill it again

Next steps

Count cancellations for the last six months Mentee By Nov 27 Send a short exit survey example Mentor By Dec 4

Mark as discussed Ask to fill again

Earlier answers

Latest · Nov 20 Sent on Oct 2

Send it before the next pricing talk

Choose a mentee who already sells and ask for their real numbers.

Sign in to Mentornity All tools