Unit Economics and Scaling Questions

Covers measuring and modelling the economics of acquiring and servicing customers and how those economics change as a business grows. Candidates should be able to calculate Customer Lifetime Value for cohorts using retention, spend per period, and margin assumptions; compute payback period and contribution margin per customer; and compare Customer Lifetime Value across acquisition channels and customer segments. Understand the relationship between Customer Lifetime Value and Customer Acquisition Cost and how that ratio informs sustainable growth. Expand analysis to unit economics beyond customers to units of product or transaction level, identifying fixed and variable cost drivers, per unit gross margin, and break even points. Reason about scale effects including economies and diseconomies of scale, what operational components break or become bottlenecks at higher volume, and how unit costs change with automation, capacity constraints, supplier pricing, fraud and support load. Be prepared to build simple spreadsheet models and run sensitivity and scenario analyses, propose operational and pricing levers to improve unit economics, and design experiments and metrics to track improvements over time.