Tomasz Tunguz writes:
“..fundamental equation of a business can be a terrific best practice for prioritizing key initiatives across product, marketing, sales and customer success. It’s also a great tool to elevate a team conversation from the everyday tasks to more strategic initiatives.”
More than helping to question assumptions, prioritize projects and align teams, the idea of a single equation diagnose the best place to focus.
Tomasz also elaborated on an example of Ad Network Revenue:
A 5% increase in each of the top line metrics would bolster revenue by 5%. But a 5% increase in impressions meant more publisher acquisitions. In contrast, a 5% increase in cost per click implied more advertiser acquisition. Depending on the comparative unit economics of at the time, Scott could recommend the right path.