money in, money out. no round numbers

A founder told me they had 44,000 users. I said it can never be a round number. Did you read that off a dashboard or did someone tell you? He’d been told.

This is how founders lose their companies without noticing. You take the steering wheel off. Someone brings you a sheet and you accept it. Then you’ve built a chain: the raise depends on traction, traction is the cofounder’s job, the cofounder hired the contractor, the contractor has the numbers. You made yourself responsible for holding that chain together, and everyone else is now incentivised to break it. The more money you raise, the worse it gets.

The fix is two questions deeper on everything. 44,350. Does that include people who signed up and never verified? How many bugs were fixed last week? Which three mattered? Why is this on the roadmap instead of that? You’re not a philosopher anymore, you’re a ticket checker. Holistic thinkers make great artists and terrible business people.

The two levers you have are money and investors. Every dollar gets signed by you. Not approved on a sheet, signed. And every fuckup gets a consequence, even if the consequence is just that everyone saw you consider firing someone. You’ll probably never have to pull either lever. People just need to know you would.

For the numbers themselves: sit with your CPA once and ask what five numbers you should see every Friday and where to find them. Then stop needing the CPA. There’s a wallet money goes out of. How much went out this week? It’s not a round number.

The chart that actually matters after the seed is cost per active user over time. If you spend half and traffic falls by half, your traction is expensive and fickle and you’re not getting a Series A. If the gap between what you pay a user and what they make you is shrinking every month, that’s a story anyone funds. Money in, money out, cumulative, by day. It’s a few hours of work, not a system.

the call where i said it best

A team said if we cut marketing by half, everything falls apart. I said then you’ve just told me your CAC curve is flat and no one should give you more money. It’s a casino. We don’t know if you’re winning or losing and you’re asking for more chips. Show the chart. If you’re on a streak, you’ll get three times the money. If you’re not, we change tables.

do this this week

Open the account money leaves from. Write down this week’s number to the rupee. Ask two questions about the largest line.

the line to remember

it can never be a round number, man. it just cannot.