Glossary / Unit economics

Unit economics

Whether a single manufactured unit earns a profit once the cost to source, build, test, and ship it at scale is counted — the make-or-break math beneath any hardware business.

Introduced in Chapter 2 — Where Hardware Startups Trip of Tangibles.

Related terms

• Minimum viable product (MVP) — A bare-minimum build that tests whether the market wants the core function.
• Mockup — A non-functional model made to test a product's look, feel, and desirability with users before committing to engineering.
• Non-recurring engineering (NRE) — One-time, upfront engineering and setup costs to reach production — design, tooling, testing — that are largely sunk and scrapped if the product fails.
• Unboxing — The customer's first physical encounter with a product out of its package — a designed moment of first impression, not an afterthought.