Break Even, Pricing, Perspective & Impact - 22 jan 2020

I like break even charts, they show it so clearly (numbers are inaccurate here, this is just for illustration purposes):

Yesterday I wrote out a bunch of reasons why I think it's okay for us to use penetrative pricing and potentially take a loss on each unit.

Given that the primary goal is to grow our impact, with the underlying assumption that increased impact will lead to greater sales and/or support, we need to (a) ensure that the price increases over time so there's a meaningful "unit contribution margin" at the right time, and (b) be extremely disciplined about documenting, measuring, understanding and communicating our impact.

However, our revenue must at least cover our variable costs (the BOM etc) - that way , we can continue to use our current runway to keep operating, and any margin can go towards supporting other products and growing the team (as in, our capabilities).

The framework I'm using to think about all of our other operational costs (which aren't covered in any of our analyses on a per product basis) is that profit/surplus from any given product (by end of next year, for e.g.) is going back towards HQ costs first. If we can understand the scope of that well, we can get some numbers on how many units of each, and what sort of revenue mix we're aiming for, in order to cover those core costs and become financially sustainable.