Software startup · 14 min
Paying for growth
Every new customer costs money today and pays it back slowly. That's how a software company can grow fast and still run out of cash.
Ticket 01 · The guess
When does this month's group pay back?
Words to know
Sources and every number
Every number
- $120
(example number: Simplified example: your tool (the first lesson's example): what it costs to win one paying customer.) · Simplified example: your tool (the first lesson's example): what it costs to win one paying customer. - $16.48
(example number: Simplified example: your tool (the first lesson's example): what a customer leaves each month after fees, servers and support.) · Simplified example: your tool (the first lesson's example): what a customer leaves each month after fees, servers and support. - 5%
(example number: Simplified example: your tool (the first lesson's example): the share of customers who cancel each month.) · Simplified example: your tool (the first lesson's example): the share of customers who cancel each month. - 9 months
(example number: Worked out month by month: the group's payments, shrinking as customers cancel, add up past what the group cost to win in the ninth month.) · Worked out month by month: the group's payments, shrinking as customers cancel, add up past what the group cost to win in the ninth month. - 7.3 months
(example number: Worked out: the cost to win a customer divided by what they leave a month, as if nobody cancelled.) · Worked out: the cost to win a customer divided by what they leave a month, as if nobody cancelled. - $8,000
(example number: Simplified example: your business software (the first lesson's example): what it costs to win one business customer.) · Simplified example: your business software (the first lesson's example): what it costs to win one business customer. - $736.46
(example number: Simplified example: your business software (the first lesson's example): what a customer leaves each month after fees, servers and their success manager.) · Simplified example: your business software (the first lesson's example): what a customer leaves each month after fees, servers and their success manager. - 1.5%
(example number: Simplified example: your business software (the first lesson's example): the share of customers who cancel each month.) · Simplified example: your business software (the first lesson's example): the share of customers who cancel each month. - 12 months
(example number: Worked out month by month, counting cancellations.) · Worked out month by month, counting cancellations. - 10.9 months
(example number: Worked out: the cost to win a customer divided by what they leave a month, as if nobody cancelled.) · Worked out: the cost to win a customer divided by what they leave a month, as if nobody cancelled. - $25
(example number: Simplified example: your app (the first lesson's example): what it costs to win one paying subscriber.) · Simplified example: your app (the first lesson's example): what it costs to win one paying subscriber. - $7.49
(example number: Simplified example: your app (the first lesson's example): what a subscriber leaves each month after the store's cut, servers and support.) · Simplified example: your app (the first lesson's example): what a subscriber leaves each month after the store's cut, servers and support. - 8%
(example number: Simplified example: your app (the first lesson's example): the share of subscribers who cancel each month.) · Simplified example: your app (the first lesson's example): the share of subscribers who cancel each month. - 4 months
(example number: Worked out month by month, counting cancellations.) · Worked out month by month, counting cancellations. - 3.3 months
(example number: Worked out: the cost to win a subscriber divided by what they leave a month, as if nobody cancelled.) · Worked out: the cost to win a subscriber divided by what they leave a month, as if nobody cancelled.