I think I never realised that I have been looking at the wrong problem statement the whole fucking time
My challenge is not to necessarily build $10 million saas
My current challenge and step is to figure out how you can get 10 annual subscribers for $30+ month in budget of $1000
That is the primary challenge.
I have the capital of $1000 and that I want to turn it into something that is above 10,000
For now in this step it is not necessary that I shall do it only it with SaaS
I can do it with other way or maybe it can be SaaS
Maybe I should try going after this new problem statement that I have embraced
I do not necessarily have a tech or engineering problem at hand I particularly have a marketing problem, where you have to figure out a product to sell and keep the monthly actual cash inflow more than your outflow
The maths that I need to crack is not CAC > lifetime value of the customer
The thing I need to crack is monthly cash flow greater than CAC, where CAC is just ad spent
To make it even more simpler, the problem statement is :
How do you make cash inflow greater than ad spend with low operational cost, with a budget solely of $1,000?
Starting up for me can never be an excuse for shrinking runway.
The goal is to have cash flows such that our base amount/runway expands as we go on and not shrink in this phase.
Growth can never compensate a negative cash flow for me.
Because growth does not imply that you will somehow have positive cash flows.
Positive cash flows imply positive cash flows and we want nothing else.
So that raises the question what can you do such that the starting capital of $1000 becomes more than $1000 in the next month even if your current liabilities have increased from sales
And those current liabilities can be set up by providing your product access or service which cost very less
What I mean by this is, for example, you have monthly subs and you sell annual for $1,000. With that sale, you have created a current liability of $900. But if the whole service to render for whole year just takes, like, $500. You are still making profit. And that’s a win. So this is why I love cash flows. You have to start in your next month with more than what you started in this month. As long as your margins are good.
Basically, the point of each month’s operation is such that you want to improve your cash position and also lock in profit. And that is done by creating current liabilities for products which have good margin.
You wanna end up at the month with more cash then you started and you want to create liabilities that you can fulfil profitably
You want to convert cash you have currently in your bank into profitable obligations this way you are manufacturing cash flow and connections.
Basically you have to collect cash faster than you deliver your service and that can happen well with good margins.