23. Simple Unit Economics

If the numbers don’t work simply, they don’t work.

You don’t need a financial model. You need a napkin. Easy Mode keeps the whole thing to one line: price times customers, minus costs, equals profit. If you can’t explain how you make money in under a minute, the model is too fragile to trust, and no spreadsheet will save it.

Here’s the napkin for a small product, top to bottom:

Price: $19 a month.
Customers: 100.
Revenue: $1,900 a month.
Costs: $400 a month for hosting and tools, plus 20 hours of your time.
Profit: $1,500 a month, before you pay yourself for those hours.

Then the two questions that decide everything, in order. First: can I acquire customers repeatedly, at a cost that still leaves profit? Second: can I keep them long enough that acquiring them was worth it? If you don’t know yet, fine, but the answer is smaller experiments, not bigger plans. You find these numbers by running the thing, not by forecasting it.

Early on, ignore the fancy metrics. Track only what keeps you alive: how you get attention, how it converts, what it costs, what you earn, and what churn looks like. Five numbers.

Napkin math keeps you honest in a way spreadsheets can’t. It stops you building a business that only works in a model. If your product sells for fifty dollars but takes you three hours to deliver by hand, you haven’t built a business. You’ve bought yourself a low-paying job, and you’re the only employee.

One sanity check I always run: if I doubled the customers, would my life get better or worse? If the honest answer is worse, more buried in delivery, more support, more stress, then growth is a trap, not a goal, and there’s a systems problem to fix before you add a single customer.

And know your kill variable, the one thing that can quietly end you: refunds, churn, ad costs, a platform’s policy change. Put a cap, a buffer, or a kill switch on it before it’s a problem, not after.

What’s the number you’ve been avoiding because you suspect it doesn’t work? Write the napkin and face it.