The gross profit vs net profit distinction is key here. Most PMs I know stop at revenue and never connect their work to actual profitability. That payback period framework is simple but brutal, especially when you realize half your backlog might have terrible payback. The shift from growth at all costs to sustainable unit economics isn't just macro driven, it's what separates PMs who survive from those who get caught flat-footed when the next downturn hits.
Fantastic breakdown of the shift from vanity metrics to real business impact. Bandan's point about payback period is criminaly underused in most PM discussions. Calculating build cost divided by profit velocity gives you a lens that makes roadmap debates way more grounded. The insight about gross profit being distorted less than net by corporate allocations really matters when your trying to isolate what the product itself is actually generating.
“At a given point in time it’s important to know what is more important for the organization—is it gross margin or is it net? Depending on what the company is striving for, that is the more important metric.”
Absolutely. Really great points brought up in this article, thanks!
This is a critical wake-up call for many PMs still operating in a growth-at-all-costs mindset. The shift from MAUs/DAUs to gross profit velocity and payback period is essential—especially since it forces us to think about unit economics from day one. I particularly appreciated the breakdown of the four profitability levels. Most teams fixate on operating profit without understanding their direct costs, which is exactly where teams lose visibility into true product health. The key takeaway for me: start partnering with finance now, even if you don't have P&L ownership yet. This self-education becomes your competitive advantage in the long run, as Bandan's example with reading Booking.com's income statements demonstrates.
Thanks for underlying that point! The toughest part is generally isolating the true value your product brings from the overall corporate overheads.
The gross profit vs net profit distinction is key here. Most PMs I know stop at revenue and never connect their work to actual profitability. That payback period framework is simple but brutal, especially when you realize half your backlog might have terrible payback. The shift from growth at all costs to sustainable unit economics isn't just macro driven, it's what separates PMs who survive from those who get caught flat-footed when the next downturn hits.
Extremely important trait for PMs growing into senior roles in 2026 and onwards!
Fantastic breakdown of the shift from vanity metrics to real business impact. Bandan's point about payback period is criminaly underused in most PM discussions. Calculating build cost divided by profit velocity gives you a lens that makes roadmap debates way more grounded. The insight about gross profit being distorted less than net by corporate allocations really matters when your trying to isolate what the product itself is actually generating.
Glad you found it helpful!
“At a given point in time it’s important to know what is more important for the organization—is it gross margin or is it net? Depending on what the company is striving for, that is the more important metric.”
Absolutely. Really great points brought up in this article, thanks!
PMs should align with business KPIs, besides the customer facing ones
This is a critical wake-up call for many PMs still operating in a growth-at-all-costs mindset. The shift from MAUs/DAUs to gross profit velocity and payback period is essential—especially since it forces us to think about unit economics from day one. I particularly appreciated the breakdown of the four profitability levels. Most teams fixate on operating profit without understanding their direct costs, which is exactly where teams lose visibility into true product health. The key takeaway for me: start partnering with finance now, even if you don't have P&L ownership yet. This self-education becomes your competitive advantage in the long run, as Bandan's example with reading Booking.com's income statements demonstrates.