Resources
The words founders decide with, defined.
Plain definitions and the formulas behind the calculator and every assessment.
- MRR (monthly recurring revenue)
- Revenue you can expect every month from active subscriptions.
MRR = customers × monthly price - Customers needed
- How many paying customers a revenue target requires at your price.
customers = target MRR ÷ price (round up) - Churn
- The share of customers who cancel each month. Small-business software often loses 3–5% a month.
churn = customers lost this month ÷ customers at the start - Growth ceiling
- Where growth levels off: the point at which customers lost to churn equal the customers you add. More effort at the same churn does not move it; lower churn or more acquisition does.
ceiling customers = new customers per month ÷ churn - New customers needed per month
- The steady acquisition rate that reaches a target by a given month, starting from zero.
new = customers × churn ÷ (1 − (1 − churn)^months) - Conversion rate
- The share of qualified leads who become paying customers.
leads needed = new customers ÷ conversion rate - As-described verdict
- The decision on the idea exactly as first pitched, before narrowing.
- Narrowed verdict
- The decision on the specific wedge that could work: one buyer, one job, one channel.
- Continue / Narrow / Pivot / Stop
- The four decisions an assessment can recommend. Each comes with the evidence that would change it.
- Founder condition
- Something only the founder can supply, such as access to buyers, a skill or hours. Missing one multiplies the odds down by a stated factor.
- Checkpoint / kill gate
- A dated, measurable target set in advance. Missing it means changing the buyer, offer or channel, or stopping, not adding features.
- Pre-mortem
- Imagine the idea has failed in two years and list the likeliest causes, with their share of failures.
- Evidence types
- Verified fact, customer evidence, estimate, judgment and unknown. Keeping them apart is what makes an assessment inspectable.
- Judgment odds
- A reasoned estimate, such as “≈ 15 in 100”, of reaching an MRR level by month 24. Not a statistic and not a guarantee.