Unit economics is used by companies for analysing cost to revenue ratio per unit or item sold. For startups, generating profit since day one can be a challenging task as companies have to also pay for certain non-operational costs at initial stages. However, if costs per unit are higher than the revenue generated per unit, the startup needs to bring down operational costs in order to generate money per order which eventually leads to the startup generating money and strong margins at the company level. Thus, investors and founders often talk about getting positive unit economics first as it eventually leads to the startup generating strong operational and net margins.