This document provides an overview and examples to help startup founders develop a "survival math" approach to estimating revenue and costs over the next few months during a time of uncertainty. It outlines estimating direct and channel revenue, accounting for costs of acquiring customers, and assessing whether the startup has enough cash to cover expenses. The document includes examples of this approach for a physical product business, an ad/commerce website, and a web/mobile app. The goal is for founders to conduct a rough but reliable estimate of whether their startup can continue operating and how changes could improve the outlook.

1. LEANING TOWARD GREAT!
WELCOME to ”Your Future in Uncertain Times”
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2. LEANING TOWARD GREAT!
…I’m as uncertain as you are
(but I have lots more scars and bruises)
@BOB DORF
SERIAL ENTREPRENEUR
(SUPPOSEDLY RETIRED)
SOME SLIDES © STEVE BLANK 2

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Welcome!
• Startups were such fun…only a month ago.,
• Usually, “nobody dies”
• Today, we see how fragile we all are…
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4. LEANING TOWARD GREAT!
Welcome!
• Startups were such fun…only a month ago.,
• Usually, “nobody dies”
• Today, we see how fragile we all are…
• …and tomorrow is more uncertain than ever!
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5. LEANING TOWARD GREAT!
We all need help
• www.sequoiacap.com “Black Swan”
• www.steveblank.com
─Virus Survival Strategy
─How to Keep Your Company Alive
─Action Today for CFO’s
• www.gsdvs.com
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The situation today
• Whoever says they know is full of……
• It’ll likely get worse before it gets better
• YOUR job as the CEO is ABC: assess, build, correct
• Speed is critical…even with revocable decisions
• And CASH is KING
• When in doubt, ask a customer!
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Customer Action Steps
• Calls and visits, not surveys: Is everybody happy?
• Best customers: how else can WE help YOU?
• Best customers: pay up, add-ons, prepay discounts
• New customers: distracted, stressed, “urgent only,”
• …so find out how YOU can do to help them
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Internal Action Steps
• Survey the market/competitive situation
• Assess your 90 day cash situation (more later)
• Grab all the cash you can find
• Study, renegotiate your top 5-10 contracts
• Cut (or double) your marketing budget bigtime
• Who can work for less, part time, for stock
• …and how little can you founders live on for now?
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BASICS OF “SURVIVAL
MATH”
• “ROUGH MATH” FOR YOUR NEXT FEW MONTHS
• GUARANTEED: THIS IS NOT “REAL” ACCOUNTING
• GOAL: A SOLID, RELIABLE ROUGH ESTIMATE
• QUESTION: CAN MY STARTUP “MAKE IT”
• NOT EVERYONE USES THE SAME MATH
THREE QUICK EXAMPLES AHEAD:
• SIMPLE PRODUCT BUSINESS SOLD DIRECT AND
WHOLESALE
• AD/COMMERCE WEB OR MOBILE SITE/PLATFORM
• WEB OR MOBILE APP
THESE AREN’T PERFECT. PICK/ADJUST/DEVELOP YOUR
BEST WAY!
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“survival math:” an overview
1. COMPUTE THE BEST ESTIMATE OF TOTAL GROSS
DIRECT CUSTOMER REVENUE, NEXT 2 OR 3 MONTHS
2. COMPUTE THE GROSS AND NET CHANNEL REVENUE
3. ADD NET CHANNEL REVENUE TO TOTAL DIRECT
REVENUE TO FIGURE TOTAL COMPANY REVENUE
4. COMPUTE ALL COSTS OF ACQUIRING CUSTOMERS
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EXAMPLE #1:
SIMPLE PRODUCT
BUSINESS
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BEFORE YOU START
COMPUTING:
DIRECT CUSTOMERS:
• HOW MANY PEOPLE A DAY(7 DAYS, 5 DAYS,
WEEKENDS?)
• WHERE WILL THEY COME FROM? AT WHAT COST?
• DO I BELIEVE MYSELF? WHAT CAN I COMPARE TO?
• DOES MY CUSTOMER DISCOVERY HELP/CONVINCE ME?
CHANNEL SALES:
• HOW MANY ACTUAL OUTLETS WILL SELL ME NEXT MONTH?
• WILL MY PRODUCT BE VISIBLE TO CUSTOMERS?
• DO I HAVE TO SPIF SALESPEOPLE? DID I COUNT THE COST?
• CAN I GET MORE STORES QUICKLY IF NUMBERS DON’T
WORK?
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REVENUE MATH:
PHYSICAL PRODUCT
$$ TYPE
UNITS
SOLD
NET $ PER
SEPTEMB
ER
OCTOBER
BREAK
EVEN
DIRECT
SALES
100/150 $5.00 $500.00 $750.00 ??
WHOLESAL
E
200/300 $5.00 $1,000.00 $1,500.00 ??
- SALE
COSTS
50% -2.50 -$500.00 -$750.00 ??
OTHER $$ 50/250 4.00 $200.00 $1,000.00 ??
TOTAL $$ $1,200 $2,500 $???
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COST MATH:
PHYSICAL PRODUCT
$$ TYPE
SEPTEMBE
R
OCTOBER LOWEST
BREAK
EVEN
SALARIES $2,000 $2,000 $1,200 $1,200
FIXED
COSTS
$800 $1000 $800 $800
CAC COSTS
($3/UNIT)
$900
(300 UNITS)
$1,350
(450 UNITS)
$1.50/UNIT
(SPEND
LESS?)
TBD
PRODUCT
COST
($2/UNIT)
$600
(300 UNITS)
$1,800
(450 UNITS)
$2.00
(NEED
1,000)
$2.00/UNIT
TOTAL $$ $3,900 $6,150 ?? ????
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NOW ADD IT UP!
MONTH ONE:
REVENUE: $1,200
CORE COSTS: $3,900
CASH NEED: $2,700
MONTH TWO:
REVENUE: $2,500
CORE COSTS: $6,150
CASH NEED: $3,650
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NOW ADD IT UP!
MONTH ONE:
REVENUE: $1,200
CORE COSTS: $3,900
CASH NEED: $2,700
MONTH TWO:
REVENUE: $2,500
CORE COSTS: $6,150
CASH NEED: $3,650
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OK, NOW WHAT?
1. DO I HAVE ENOUGH CASH TO “MAKE THE MONTH?”
2. HAVE I INCLUDED ALL (PRODUCT DEV, LEGAL, TAX, BEER)
COSTS?
3. WHAT IF I DON’T?
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OK, NOW WHAT?
1. DO I HAVE ENOUGH CASH TO “MAKE THE MONTH?”
2. HAVE I INCLUDED ALL (PRODUCT DEV, LEGAL, TAX, BEER) COSTS?
WHAT IF I DON’T??
─ CAN I CUT SALARIES FOR A WHILE?
─ DOES AN INCUBATOR WANT ME(OVERHEAD VS EQUITY)?
─ CAN I SPEND LESS ON CUSTOMER ACQUISITION?
─ CAN I DELAY/REDUCE ANY SPENDING AT ALL?
─ WILL ANY VENDORS EXTEND PAYMENT? FOR STOCK?
─ DO I HAVE A RICH UNCLE OR OTHER INVESTOR?
─ HOW OFTEN DO I GO TO CHURCH?
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OH CRAP! IT’LL NEVER
HAPPEN!
1. GO BACK TO THE BUSINESS MODEL.
CHANGES??
─ CUSTOMER ACQUISITION METHOD OR SPENDING
─ SWITCH TO PR, VIRAL MARKETING, CHEAP
METHODS
─ REDUCE PAYROLL, OVERHEAD, CHANNEL COSTS
2. CAN YOU SELL MULTIPLE UNITS, REPEAT
ORDERS?
3. CAN YOU SELL MORE DIRECT, BUILD UP
SLOWER?
4. GET HELP: MENTORS, UNCLES, BANDITOS
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EXAMPLE #2:
AD/COMMERCE WEBSITE
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EXAMPLE #3:
WEB OR MOBILE APP
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Спасибо!
bobdorf@gmail.com
twitter: @bobdorf
www.bobdorf.nyc
For more help…Dobro Pozhalovat:
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