When tackling the task of modeling unit economics in a startup, one typically starts with Krasinski's formula: CM = UA × (CLTV × C₁ — LTC) But this raises a question: how do you derive a formula that accurately reflects the reality of your specific business with its unique model?

What kinds of differences can exist between business models? I would divide them into two types: the first concerns the organization of sales processes and costs, and the second deals with the organization of monetization. Today, we’ll focus on the first type.

Organization of Sales Processes 

Let’s start with sales processes, which in unit economics are represented by the conversion metric (C₁). What does this mean? First, it refers to the conversion of a potential client into an actual buyer. This is not simply the conversion of a website visitor into a transaction, but rather the conversion of a potential buyer into a customer. 

Second, the conversion process itself consists of several stages: for example, a site visitor selects a product, adds it to the cart, arranges delivery, chooses a payment method, and completes the purchase. At each stage, they may drop off. When searching for growth points, as described in the article “Focus in a Startup: How to Identify Growth Points and Optimize Business Processes Through Unit Economics,” it’s helpful to consider conversion at each step, not just overall conversion. 

To do this, the conversion formula is replaced with: 

Where C1i is the conversion at step i. The formula for calculating margin then becomes: 

This allows you to identify growth points for each step of the funnel. In the ueCalc service, it's easy to do. In the conversion cell, you can open the funnel settings window by pressing M or clicking the settings icon on the left.

You can specify funnel steps by indicating the conversion at each step or by entering the number of users who pass each stage. Then, ueCalc will offer all its features for finding growth points while accounting for your process management characteristics, including each funnel step. 

Organization of Cost Processes 

Beyond the funnel, similar characteristics can apply to costs such as COGS and 1sCOGS. These metrics can depend on the average check size. For example, you may pay a bank 3% of the transaction amount and a fulfillment specialist a fixed 100 for order processing. 

By setting the values of all business process metrics, ueCalc can use each to identify growth points and optimize your business model. 

This allows for things like reducing packaging costs through automation to 80, but it may not allow for changing banking service fees. 

Thus, ueCalc templates make it easy to incorporate any level of complexity in business processes. The key is to accurately describe what processes exist and how you can influence them.