Money, Pricing & Model

My unit economics work on a spreadsheet but I'm bleeding cash every month. Why the disconnect and what do I fix first?

A starting point

Positive unit economics per customer can still coexist with a cash crunch because fixed costs (salaries, tools, rent) and the timing gap between spending on CAC and earning it back live outside the per-unit math. Your model shows the destination, your bank account shows the journey, and growth actually widens the gap before it closes it. As a starting point, separate per-unit profitability from company-level burn, then attack the two biggest levers: shorten CAC payback and cut fixed costs that aren't buying you growth or product.

Go deeper

Hand-picked from around the web, each with a note on why it earns your time.

3 resources 2 link-checked Watch Read Use

Watch

▶️ Video
✓ Link checked Free Beginner

Why we picked it YC partner Tim Brady defines burn rate and runway plainly in a few minutes, which is the vocabulary you need to see why a profitable-looking product can still empty the bank. It separates gross burn (everything you spend) from net burn (spend minus what actually comes in), the split that explains the disconnect you are feeling. Short and founder-facing, so it is a fast reset before you re-open your model.

How to calculate burn rate, runway, and growth rate

On Y Combinator by Tim Brady About 6 minutes

How to calculate burn rate, runway, and growth rate
  • Net burn, not per-unit margin, is what drains the account: it is total monthly spend minus real cash coming in, and it can stay negative while each sale looks profitable.
  • Runway equals cash in the bank divided by net burn, so the fix-first lever is usually the fixed spend sitting in gross burn.
  • Watching burn and growth together tells you whether each dollar spent is buying enough progress, or just buying time.
Watch on YouTube youtube.com →

Read

📄 Article
Free Intermediate

Why we picked it This is the clearest walk-through of the exact trap you are in: your spreadsheet shows a healthy per-unit margin because unit economics only counts variable costs and quietly ignores fixed costs, so the business looks profitable long before it actually is. The author (a former VC-backed founder turned CFO) draws the contribution-margin-vs-fixed-cost lines and shows where they cross, which is the number you are really chasing. Treat it as a starting point for re-modeling with your fixed costs in, not as a verdict on your business.

Don't Scale an Unprofitable Business: Why Unit Economics (Still) Matter

From Toptal by Toby Clarence-Smith About a 15 minute read

  • Positive unit economics and a cash-losing month are not a contradiction: per-unit margin covers variable costs only, and your rent, salaries, and tooling sit outside that math until you hit enough volume.
  • The number to solve for is contribution margin times units minus fixed costs, so fix your model by adding the fixed-cost floor first, then see how many units it actually takes to cross zero.
  • Bigger absolute margin per sale (not just a nice percentage) is what lets you grow into a fixed cost base, so a low-ticket product can bleed longer even with the same margin percent.
Open toptal.com →

Use

🛠️ Tool
✓ Link checked Free Beginner

Why we picked it Once you accept that the spreadsheet lied about your cash, this template makes the timing gap concrete: you enter your real starting cash, revenue, and monthly expenses and it lays out burn, net cash, and runway month by month. It is free with no email wall, and the scenario tabs let you test what happens if you cut a fixed cost or push a hire out. Plug in your actual numbers rather than trusting a single average burn figure.

Startup Runway Calculator Template (Excel and Google Sheets)

From The Startup Project by The Startup Project Downloadable spreadsheet, 15 to 30 minutes to fill in

  • Runway is just current cash divided by net monthly burn, and seeing it laid out month by month exposes the exact month you run dry.
  • Because it separates revenue, headcount, and expenses, you can watch how trimming one fixed cost (a hire, a tool, an office) moves your runway more than chasing a few more sales.
  • Model conservative, base, and aggressive cases so you are not planning off a single optimistic line.
Open startupproject.org →

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