Your startup raised $500K 12 months ago. You have 8 months of runway left. You’re burning $50K monthly. Revenue is growing 20% month-over-month, but you’re still losing money. The problem isn’t growth—it’s unit economics.

Why your startup is burning cash too fast

• Poor unit economics: $100 CAC, $80 LTV, negative unit economics
• Inefficient operations: 40% of team time on non-revenue activities
• High customer acquisition cost: Spending $100 to acquire $80 customers
• Low customer lifetime value: 70% churn in first year
• Operational bloat: Too many tools, too much overhead

The real cost of poor unit economics

• Shortened runway: 8 months instead of 18 months
• Investor concerns: Can’t raise next round with negative unit economics
• Growth ceiling: Can’t scale profitably
• Team stress: Constant pressure to reduce burn
• Competitive disadvantage: Competitors with better unit economics can outspend you

The 5-step cash conservation framework

1. Fix unit economics first

• Calculate true CAC including all acquisition costs
• Improve customer lifetime value through retention
• Focus on channels with positive unit economics
• Fire unprofitable customer segments

2. Optimize customer acquisition

• Focus on organic and referral channels
• Improve conversion rates instead of increasing ad spend
• Retarget existing customers for upsells
• Build partnerships and affiliate programs

3. Streamline operations

• Automate manual processes
• Consolidate tools and subscriptions
• Outsource non-core activities
• Implement proper project management

4. Improve customer retention

• Fix onboarding and user experience
• Implement customer success programs
• Build loyalty and referral programs
• Monitor and reduce churn

5. Extend runway strategically

• Negotiate better terms with vendors
• Consider revenue-based financing
• Focus on profitability over growth
• Prepare for fundraising with better metrics

Real results from better unit economics

• SaaS startup: 8 months → 24 months runway with same revenue
• E-commerce: $100 CAC → $35 CAC with better targeting
• B2B service: 70% → 30% churn rate in 6 months

The hidden cost of poor unit economics

Every month of negative unit economics costs you $50K+ in lost runway. Fix the economics, not just the growth.

Common startup mistakes

• Focusing on growth over profitability
• No unit economics tracking
• High customer acquisition costs
• Poor customer retention
• Operational inefficiency

Related reads

• Development team management → /blog/Why_Your_Development_Team_Is_Always_Behind_Schedule
• SaaS churn reduction → /blog/Why_Your_SaaS_Churn_Rate_Is_Killing_Your_Growth

Ready to extend your runway?

We help startups optimize unit economics and operational efficiency to extend runway and achieve profitability.

• Get a free unit economics audit → /freequote
• See our startup case studies → /contact
• Book a strategy call → /meet