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reeses | 11 years ago

That's not a problem with the chart. That's a problem with starting a business.

You don't have to grow along a fixed axis, whether that be # of users, # of widgets, etc. You just have to average the growth in income.

I had a similar initial reaction to the chart because I stick to R&D-driven startups that will run at $0/week for as long as it takes. However, pushing the stop-energy out of my head and running with it is a good gut check for viability on breaking even given assumptions about expenses vs income over time.

The output isn't "we will grow at an annualized 360% forever, yielding foo," it's "we only need to kick in $x to have a good shot at getting to B/E."

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nostrademons|11 years ago

Yeah, I think many startups have a fairly long customer/product development period where their revenue will be $0, and then quickly pour on the gas once they have users and want to monetize.

I wish the tool had an additional degree of freedom, which is "time until first revenue". That would let you model how much time-to-market is costing you until breakeven, and trade off a business idea that generates revenue immediately vs. another business idea that takes a long time to incubate but may have a higher growth rate. I guess you can figure it out with some quick mental math (just multiply monthly expenses by time-to-market and add that on to capital required, and add the time-to-market on to the breakeven time), but if it were in the tool it'd be easier to visually see the effects of different choices there.