Brew Profits in the Cloud: Think Like a Coffee Shop Owner

A Fresh Brew of Unit Economics for Smarter Cloud & SaaS Spending

Brew First, Then Budget

I've had numerous conversations with directors, senior managers, and teammates about cloud costs. For a while, I genuinely believed that aggressive cost-cutting was the smartest path forward until a moment of clarity changed everything.

It felt like running a coffee shop and turning off the espresso machine to save on electricity. Sure, the savings showed up fast, but so did the drop in purpose and value. That simple analogy hit home and reshaped how I think about cloud spending.

It's not about cutting for the sake of cutting. It's about making every cloud dollar count by understanding each byte's value. This blog is about the shift from blind cost reduction to intelligent, value-driven decision-making. Let's dive in.

In this post, I'll share how understanding unit economics through simple, everyday analogies can help you make each cloud dollar work harder, whether deep in infrastructure or building SaaS tools.

What Are Unit Economics?

Unit economics is figuring out how much profit (or loss) you make from a single unit of your offer, like one processed report in cloud analytics or one monthly subscription to a SaaS app. It's your way of measuring whether your service is worth what it costs to deliver.

Think of it like this:

Coffee Shop Analogy: You sell a latte for $5.It costs you $3 to make (beans, milk, cup, labor). Your unit economics = $2 profit per cup.

Cloud Example: Profits in Every Processed Byte

Let's say your cloud-based product processes reports for customers.

• Unit: One processed report

• Revenue per unit: $10

• Costs:

  • Compute time (VMs): $3

  • Storage: $1

  • Data transfer & monitoring: $1

  • Total cost per unit: $5

Profit per report: $10 – $5 = $5 per unit

So, rather than shutting down VMs to save money, you optimize the report process to deliver more value per dollar.

SaaS Example: Serving Value by Subscription

Now, imagine you run a CRM tool with monthly plans.

• Unit: One paying user/month

• Revenue: $30/month

• Costs:

  • Cloud hosting: $4

  • Support: $3

  • Marketing & sales (amortized): $6

  • R&D allocation: $2

  • Total: $15

Profit per user/month: $30 – $15 = $15 per unit

Now, you can calculate the months to recover your customer acquisition cost (CAC) and scale smarter.

How to Discover Your Unit Economics

Here's a powerful question I often ask teams:

"If we turned off your system tomorrow, what would your customers miss?"

This question forces you to think about the value you deliver. Once you can define that unit of value, measuring its cost becomes a strategic insight, not just an accounting number.

Bring the right people to the table: engineers, finance, ops, product owners. Reflect on what your service enables and who benefits from it.

Final Brew: It's Not About Cutting, It's About Brewing Smarter

Slashing cloud costs without context is like tossing out chairs in your coffee shop to lower your rent. Sure, you save money, but you also lose customers.

Instead, shift your mindset. Start thinking like a smart shop owner:

• Know your ingredients (cloud components)

• Price wisely (understand value)

• Track every cup (unit) that leaves your counter

  
  

When you make every cloud dollar count, you're not just saving, you're scaling with purpose. 

What's Brewing in Your Cloud Kitchen?

Have you tried calculating your unit economics? What "latte moments" have helped you rethink your cloud or SaaS strategy? Rethink your cloud or SaaS strategy?