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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?

You win a group of customers this month at $120example (example number: Simplified example: your tool (the first lesson's example): what it costs to win one paying customer.) each. Each one leaves $16.48example (example number: Simplified example: your tool (the first lesson's example): what a customer leaves each month after fees, servers and support.) a month, and 5%example (example number: Simplified example: your tool (the first lesson's example): the share of customers who cancel each month.) of the group cancel every month. In which month has the group paid back what it cost to win?

6 months
1 month24
Words to know

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Tell us what looks off. No name or email needed.

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Sources and every number

Every number

  • $120example (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.
  • $16.48example (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 (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 monthsexample (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 monthsexample (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.
  • $8,000example (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.
  • $736.46example (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 (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 monthsexample (example number: Worked out month by month, counting cancellations.) · Worked out month by month, counting cancellations.
  • 10.9 monthsexample (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.
  • $25example (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.
  • $7.49example (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 (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 monthsexample (example number: Worked out month by month, counting cancellations.) · Worked out month by month, counting cancellations.
  • 3.3 monthsexample (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.
  1. Lessons›
  2. Industries›
  3. Software startup
  • ·Before this: Hiring the first engineers
  • ·Next: Test demand before you build
  • ·Free guide: How software companies make money
Skip to the lesson
Back to the home page and map, from TryOwning · Software startup · Lesson 4
Part 1 of 3Part 1 of 3, 0 done

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?

You win a group of customers this month at $120example (example number: Simplified example: your tool (the first lesson's example): what it costs to win one paying customer.) each. Each one leaves $16.48example (example number: Simplified example: your tool (the first lesson's example): what a customer leaves each month after fees, servers and support.) a month, and 5%example (example number: Simplified example: your tool (the first lesson's example): the share of customers who cancel each month.) of the group cancel every month. In which month has the group paid back what it cost to win?

6 months
1 month24
Words to know

Spot something wrong?

Tell us what looks off. No name or email needed.

What kind of problem?

0 / 1000

We'll also send this page, the lesson, ticket 1, so we can find it. Nothing else. Privacy

·
Sources and every number

Every number

  • $120example (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.
  • $16.48example (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 (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 monthsexample (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 monthsexample (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.
  • $8,000example (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.
  • $736.46example (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 (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 monthsexample (example number: Worked out month by month, counting cancellations.) · Worked out month by month, counting cancellations.
  • 10.9 monthsexample (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.
  • $25example (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.
  • $7.49example (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 (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 monthsexample (example number: Worked out month by month, counting cancellations.) · Worked out month by month, counting cancellations.
  • 3.3 monthsexample (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.
  1. Lessons›
  2. Industries›
  3. Software startup
  • ·Before this: Hiring the first engineers
  • ·Next: Test demand before you build
  • ·Free guide: How software companies make money