Unit economics
What does cost per unit of value reveal that absolute spend cannot?
Unit economics means cost per unit of value, for example cost per active user. Absolute spend tells you little, because it grows with the business. The diagnostic content is in the ratio and, more precisely, in the ratio's derivative (whether it is rising or falling).
| Ratio | What it means |
|---|---|
| Flat $/active user | cost scales linearly with value; nothing is wrong |
| Rising | cost is superlinear in scale. Usual causes: a join whose cost grows faster than its inputs; metadata cardinality growing with partition count; the retention integral compounding while query volume does not |
| Falling | fixed cost is amortizing; you are in the good regime |
That is the whole reason to compute it: it separates growth from decay, which the absolute number cannot.
The denominator is a proxy
The denominator is a proxy and carries a systematic residual. $/query falls when people write fewer, larger queries, which may be better or worse. $/GB ingested falls when you ingest junk. The denominator should track value, not activity, and no denominator does that perfectly. The correct move is to watch two denominators whose residuals point in opposite directions, not to search for the one right one.
Where this mechanism closes on itself
Unit economics is the only cost quantity that can be forecast. Forecasting is what commitment sizing consumed in Commitments, and the forecast's error bars are what the quantile rule of Commitments operates on.
Attribution → unit economics → forecast → commitment. The output of the outer loop is a purchasing decision, not an engineering one.