ENGINES OF GROWTH 
RESOURCES 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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UNIT ECONOMICS 
 
RECURRING & NON-RECURRING MODELS 
 
 

RECURRING  Models that depend on the customer coming back. 

Long term relationships, slower payback cycles. 
   
(CUSTOMER) 
 

 
 
Frequency & Repetition 
Uber, marketplaces, game apps… 
 
Subscriptions 
Netflix, gyms, SaaS, Spotify... 
 
 
 

NON- RECURRING  Models that depend on being profitable with the 

first sale. Short term relationship, faster payback 
  cycle. 
(SALE)   
 

 
 
Examples 
Car dealerships, e-commerce stores, ThePowerMBA 

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COSTS 

CAC  How much are we spending to acquire a 

customer? 
  Customer Acquisition Cost - how much does it cost 
us to acquire one new customer? One new sale? 
 
 
Customer Based Calculation (CAC): 
 
Total acquisition costs (​ ​time​) 
 
# of new customers per ​(​time​) 
 
 
Sale Based Calculation (CPA, “cost per action”): 
 
Total acquisition costs ​(​time​) 
 
# of new sales per ​(​time​) 
 
 
 
 
 

REVENUES 
  

 
CLTV  How much total value are we getting from every 
customer? 
   
Customer Lifetime Value - measure the total value that 
one customer generates over their lifetime as a 
customer. 
 
“lifetime” revenues per customer X Gross margin (%)
 

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ARPU  How much revenue are we getting from a 

customer in a certain time period? 
 
Average Revenue Per User is a key metric in 
recurring revenue models. How you calculate it 
will depend on many factors like your business 
model, frequency, and revenue streams.  
 
Revenue (per time period) 
 
# of users (per time period) 
 
 
 

CHURN RATE  How many (%) customers are we losing 

in a period? 
 
A key metric in recurring business models. 
 
# of customer lost (in the period) 
 
# customers at the start of the period 
 
 
 
 
 

PROFITABILITY 
 
  
CLTV - CAC  How much profit do we make off of each 
customer? 
 
Track this metric closely! Optimizing it should be a 
part of your strategic objectives, e
​ specially in digital 
businesses. 
 

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CLTV / CAC  How much do we multiply our acquisition 

investment by? 
 
This ratio represents your return on CAC 
investments. 
 
 
 
 

CAC PAYBACK  How long does it take to make back our CAC 
investment? 
 
The average amount of time that passes between 
investing money in CAC (acquiring customers) and 
getting it back. 
 

 
 
 
 
 

 
 

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 TYPES OF ENGINES OF GROWTH 

Engines of growth  What is it for? 

  How can it help you? 
  
Discover which core, sustainable growth mechanism 
is best for your business model. 
 
> See which metrics are important for you 
> Choose the engine that suits your model 
  > Crack the code to generating sustainable growth 
Developed by Eric Ries of Lean 
Startup   
   
 
 
 
 

PAID  Approach 
Acquire customers by investing in paid marketing, 
making a profit on the sale, and reinvesting as much 
of the profit as possible in marketing ASAP. 
 
When to use 
When you have a fast payback cycle and a big 
enough margin. 
 
The Benefits 
It’s fast! You don’t have to wait long to see the results. 
You don’t have to rely on outside funders for money. 
 
Key Metrics 
*You’ll understand key metrics in the program. 
- Optimize margins (CLTV - CAC) or (CLTV / CAC) 
ratio 
- Optimize Payback 
 

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ORGANIC  Approach 
You acquire customers by leveraging content 
marketing material, social media, etc. 
 
When to use 
When you can’t afford a Paid Engine of Growth or if 
you have a big audience (millions of followers, 
subscribers, etc.) 
 
The Benefits 
Predictability 
Recurring revenues 
 
Key Metrics 
*You’ll understand key metrics in the program. 
- Optimize margins to be able to switch to a real 
paid engine of growth 
 
 
 
 
 

STICKY  Approach 
You retain as many customers as possible with a low 
acquisition rate, and they keep coming back 
frequently and you maintain them over time 
 
When to use 
Subscription based models like Netflix, gyms, or 
monthly services. 
Models based on high recurrence like Uber or food 
delivery apps. 
 
The Benefits 
Higher margins 
(But it’s slower!) 
 
Key Metrics 
*You’ll understand key metrics in the program. 
- Reduce Churn Rate 
Optimize CLTV by extending lifetime. 

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VIRAL  Approach 
Your customers bring in new customers in a 
sustainable way, and you grow “like a virus” and with 
very low marketing investment. 
 
When to use 
You have lots of recommendations and loyalty. You 
need a viral coefficient over 1. It’s the only option 
when you can’t afford high acquisition costs. 
 
The Benefits 
Usually really fast 
It’s free!! 
 
Key Metrics 
*You’ll understand key metrics in the program. 
- Viral Coefficient 
- Cycle time 
 
 
 
 
 
 
 
 

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