Really interesting take. We chat with lots of strat finance/ product finance folks and aligning the relationship is hard.
It seems to me like one of the most difficult parts is often the quality of data at companies. If you have highly variable cogs but don't have the granularity to distinguish between users, it's really hard to be data-driven.
yeah, it is really hard. I have seen that generally the way is to build an internal data/ unit economics platform. This means ask your data team to match each cost to your transactions/ events/ users. For example, if you have a payments vendor, it would mean taking your PDF agreements, extracting exact pricing and matching that with all transactions. As you do that across all your costs, you get a per-user PnL.
I am biased for the following but I actually built my company around solving this problem. At Margin, we help companies get to a per-user PnL in 5 days. Since the only thing harder than getting good data is using it well, we then run an AI strategic finance data analyst to find and implement ways to optimize margins.
I think the easiest way to see how to get COGS on a per user basis is by looking at how we productized it. We have a whole demo explaining how to get the data granularity. Skip to min 2:15 on this vid: https://www.youtube.com/watch?v=A84w-sjq2f8
My intention wasn't to market here but I've genuinely seen lack of good data being a huge bottleneck for lots of finance team. I love your content and I am super happy that I found your newsletter. So much gold for me!!
Really interesting take. We chat with lots of strat finance/ product finance folks and aligning the relationship is hard.
It seems to me like one of the most difficult parts is often the quality of data at companies. If you have highly variable cogs but don't have the granularity to distinguish between users, it's really hard to be data-driven.
Great call out - how do you get to COGs on a per user basis. It’s very difficult
yeah, it is really hard. I have seen that generally the way is to build an internal data/ unit economics platform. This means ask your data team to match each cost to your transactions/ events/ users. For example, if you have a payments vendor, it would mean taking your PDF agreements, extracting exact pricing and matching that with all transactions. As you do that across all your costs, you get a per-user PnL.
I am biased for the following but I actually built my company around solving this problem. At Margin, we help companies get to a per-user PnL in 5 days. Since the only thing harder than getting good data is using it well, we then run an AI strategic finance data analyst to find and implement ways to optimize margins.
I think the easiest way to see how to get COGS on a per user basis is by looking at how we productized it. We have a whole demo explaining how to get the data granularity. Skip to min 2:15 on this vid: https://www.youtube.com/watch?v=A84w-sjq2f8
My intention wasn't to market here but I've genuinely seen lack of good data being a huge bottleneck for lots of finance team. I love your content and I am super happy that I found your newsletter. So much gold for me!!