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  • About 70 min
  • 9 steps · 2 quizzes

Startup Math — The Numbers Behind a Business

How a business really makes — or loses — money, told through one made-up coffee subscription, Bean Mail, from its first box to month 24.

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9 steps · 2 quizzes · about 70 minutes · open any step

  1. Revenue isn't profitStart hereMeet Bean Mail, a made-up coffee subscription: one box of fresh beans a month for $30. Every number in this lesson is Bean Mail's, and each step reuses the one before. Revenue (sales) is all the money coming in. Profit is what's left after every cost.InteractiveHands-on · 6 min
  2. One box: unit economicsZoom in on a single box. Unit economics asks: does each sale make money on its own?InteractiveHands-on · 6 min
  3. The cost of winning a customerCustomers don't arrive for free. Bean Mail buys online ads: many people see them, a few click, fewer still subscribe. Customer acquisition cost (CAC) = money spent on marketing ÷ new customers it brings.InteractiveHands-on · 6 min
  4. What a customer is worthA customer brings $18 of gross profit every month… until they cancel. Churn is the share of customers who cancel each month. Bean Mail's is 6%. If 6% leave each month, the average customer stays about 1 ÷ 0.06 ≈ 16.7 months.InteractiveHands-on · 6 min
  5. LTV : CAC — is a customer worth winning?Put the last two steps together: a customer costs $100 to win and brings in $300. That's 3 : 1.InteractiveHands-on · 6 min
  6. Check: the numbers of one customerQuiz · 5 questions
  7. Churn compounds6% a month sounds small. But each month it takes 6% of whoever is left, again and again. Try it: press Play 24 months. Then try 3% and 10%.InteractiveHands-on · 6 min
  8. Break-evenNow the whole business. The team and rent cost $7,200 a month, whatever happens. Each customer brings $18 of gross profit. How many customers cover those fixed costs? Break-even = fixed costs ÷ gross profit per customer = $7,200 ÷ $18 = 400 customersInteractiveHands-on · 6 min
  9. Burn rate and runwayBelow break-even, Bean Mail spends more than it earns. The gap is its burn rate; how long its cash lasts is its runway. Runway = cash in the bank ÷ monthly burnInteractiveHands-on · 6 min
  10. Growth vs profit: run Bean Mail for two yearsNow everything at once: ads bring customers (at a rising CAC), churn takes them away, gross profit pays the fixed costs, and the bank balance keeps score. Your challenge: keep the cash above zero and be profitable by month 24.InteractiveHands-on · 6 min

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