A pricing tool for founders
Most founders set price by looking at a competitor and going lower. That competitor has volume, fixed costs already covered, and a funnel you do not have. Answer six questions and see the shape of your own business instead. This is a guide to how the money moves, not a prediction, and every number in it is yours to argue with.
Answer the six questions and your verdict appears here.
The tool names the first constraint that starts to bite, so you know which one is worth working on.
A guide, not a forecast. Change any number below and watch this move.
Charging more usually means winning fewer. These rows assume that if you double the price, demand softens. Nobody knows your real number, so try all three and see which prices survive.
Where that number comes from
It tells you the price your business needs, not the price your market will pay. Those are different questions and the second one is harder. Nothing in here knows what your customers think you are worth. The only way to find that out is to ask for money and see what happens.
Its precision is greater than your inputs deserve. Churn, retention, conversion and cost per customer are the four numbers that drive everything on this page, and they are exactly the four a founder is most likely to be guessing at. A confident-looking verdict built on four guesses is still four guesses. Treat every output as a question to go and test, not an answer.
It holds the world still. Churn improves as you find the right customers. Conversion improves as the offer sharpens. Prices rise. This tool assumes none of that, because modelling it would mean inventing numbers you have not earned yet. Real businesses move.
It cannot model your actual business. Three clean models, one at a time. Real companies run a retainer alongside a product, or a free tier under a paid one, and the interesting economics usually live in the seam between them.
If you take one thing from it, take the ceiling. Customers you win each month, multiplied by how many months they stay. That number caps your business no matter how long you wait, most founders have never calculated it, and it is the reason plans that looked fine on a spreadsheet flatten out in year two. Everything else here is arithmetic you could do yourself. That one is worth the visit.
Everything runs on one equation. ceiling = customers you win per month × how long they stay. At 5% monthly churn a customer stays 20 months, so you top out at 20 times your monthly signups. Not eventually. Ever. Most founders have never calculated this number, which is why they are surprised when growth flattens at month 18.
Services swap churn for hours. A retainer business has the same ceiling equation, plus a second one: the most clients you can carry at once. Whichever is lower is your real ceiling. Hiring moves that wall and lowers your margin at the same time, so it moves the problem rather than solving it.
A one-time product has no ceiling and no floor. You start every month at zero. Revenue is whatever you sold that month, which is why the model lives or dies on whether the funnel keeps growing.
Cost to acquire is a monthly cost, not a one-off. At steady state you pay to replace churned customers forever, so acquisition is folded into the per-customer margin here as cost to acquire ÷ months they stay. If that is bigger than what a customer pays you each month, nothing downstream can save it.
Raising price does not hold conversion still. This tool changes one number at a time on purpose. When you test a higher price, drop your conversion rate too and see whether the answer survives. If it does, you were underpricing.
The numbers here are yours, not benchmarks. Nothing is stored or sent anywhere. The whole thing runs in your browser and the link button just packs your answers into the URL. How the math works, and what the 3 to 1 rule actually means.
Most founders set a price by looking at a competitor and going slightly lower. That competitor has volume you do not have and fixed costs that are already covered, so the same number funds a completely different business for them. This tool ignores their price until the end. It starts with the income you need and works out what your own business has to do to produce it.
You answer six questions. It returns one thing: the constraint that starts to bite first. There are four, and they are checked in order, because only the first one is worth working on. Nothing here is a forecast. It is a way to see the shape of your own business before you commit two years to it.
What one customer is worth to you each month after delivery and acquisition. If this is not positive, growth makes things worse and nothing below it matters.
The most you can deliver. A services business usually dies here: you run out of hours before you run out of demand, and hiring moves the wall while lowering the margin.
New customers per month multiplied by how long they stay. This is where a subscription business plateaus, and no amount of time moves it.
How long until the business pays you what you asked for. A model can be sound and still take longer than you can personally survive.
ceiling = customers you win per month × how many months they stay
At 5% monthly churn a customer stays 20 months, so you top out at 20 times your monthly signups. At 3% you top out at 33 times. This is the number almost nobody calculates before they build, and it is the reason growth flattens around month 18 in businesses that looked fine on a spreadsheet. A services business runs the same equation with retention replaced by client lifespan, capped a second time by the number of clients you can physically carry.
Every question that needs operating history can be marked unknown: how many customers you win, how long they stay, how much they cost to acquire, how much traffic you get. When you do, the calculator stops forecasting and starts solving. It tells you the acquisition rate you would need to hit, the minimum retention that makes your price work, and the most you could pay for a customer. A guess produces a false forecast. A requirement is something you can go and test this week.
Work backwards from the income you need, not sideways from a competitor. Take the money you want to pay yourself each year, add your fixed costs, and divide by the number of customers you can realistically win and keep. That is the price your business actually requires. Any number below it is a decision to earn less, and any number a competitor charges is a fact about their business, not yours.
Divide the income you need plus your fixed costs by what one customer is worth to you each month after delivery and acquisition costs. At $120,000 a year with $1,500 a month of fixed costs, you need $11,500 a month in gross margin. A customer worth $16 a month means 719 customers. A customer worth $2,300 a month means five. The price you choose decides which business you are running.
Because every subscription business has a ceiling, and most founders have never calculated it. Your ceiling is the number of customers you win each month multiplied by how many months they stay. At 5% monthly churn a customer stays 20 months, so you top out at 20 times your monthly signups. Not eventually. Ever. Growth flattening around month 18 is not a marketing failure, it is arithmetic arriving on schedule.
It is a widely used convention that says the lifetime value of a customer should be at least three times what you spent to acquire them. The reasoning is that the other two thirds have to cover delivery, overhead, and the customers who never pay back at all. It is a rule of thumb rather than a law, and it is sensitive to how you measure lifetime value: an uncapped LTV that assumes a customer pays forever will justify almost any acquisition cost, which is how founders talk themselves into overspending. Capping the window at 12 or 24 months keeps the number honest.
Two limits apply and the lower one wins. The first is the 3 to 1 convention: a third of what a customer is worth inside your chosen window. The second is your own income goal: the most you can pay and still take home the number you asked for. Above either of those you are buying growth on terms that never reach your target. Above the full lifetime value you are losing money on every customer, and more marketing makes it worse.
Usually not, and the reason is structural. An established competitor has fixed costs already covered and volume you do not have, so the same price funds a different business for them than it would for you. Matching a lower price is not a pricing decision, it is a commitment to build a funnel several times larger than the one you have. The cheaper move is a better offer: a narrower niche, a harder problem, or something they are too big to bother delivering.
Yes, and it is arguably more useful before launch than after. When you mark a number as unknown, the calculator stops projecting and starts solving. Instead of asking how many customers you get, it tells you how many you need and the rate you would have to sign them at. Instead of asking how long they stay, it tells you the minimum retention that makes your price work. A guess produces a false forecast. A requirement is testable.
It cannot tell you what your market will pay. A calculator works out the price your business needs in order to produce the income you want, which is arithmetic. What a customer thinks you are worth is not arithmetic, and the only way to find it out is to ask for money and watch what happens. A calculator is also only as good as the four numbers driving it, churn, retention, conversion and cost per customer, which are exactly the numbers a founder is most likely to be guessing at. Use it to find the assumption you have not questioned, then go and test that assumption against a real buyer.
More than most founders expect, and the arithmetic is worth doing before you flinch. If doubling your price halves your demand, your revenue is unchanged but you serve half as many customers for it, which means half the delivery, half the support and half the churn to replace. If demand falls by less than half, you make more money and do less work. The break-even point is the moment lost volume exactly cancels the higher price, and below that point raising the price is free.
They fail in different places. A services business hits a capacity wall: you run out of delivery hours before you run out of demand, and hiring moves the wall while lowering your margin. A subscription business hits a churn ceiling: new customers times retention sets a plateau that time cannot move. A one-time product has no ceiling and no floor, because nothing carries over and every month starts at zero. The same price can be healthy in one model and fatal in another.
The acquisition budget in this tool uses a convention borrowed from subscription businesses and direct response: the value of a customer should be at least three times what you spent to acquire them, leaving the other two thirds to cover delivery, overhead, and everyone who never pays back. It is a rule of thumb, widely repeated and not universally agreed on, and it is only as honest as the lifetime value you feed it. An uncapped lifetime value assumes a customer pays you forever and will justify almost any acquisition cost, which is exactly how founders talk themselves into overspending. That is why the window here is a visible control set to 12 months by default, and why the tool also shows two other limits beside it: the most you can pay and still hit your income goal, and the point at which you break even. Whichever is lowest is your real budget.
It tells you the price your business needs, not the price your market will pay. Those are different questions and the second one is harder. Nothing in here knows what your customers think you are worth. The only way to find that out is to ask for money and see what happens.
Its precision is greater than your inputs deserve. Churn, retention, conversion and cost per customer drive everything on this page, and they are exactly the four numbers a founder is most likely to be guessing at. A confident-looking answer built on four guesses is still four guesses. Treat every output as a question to go and test, not a conclusion.
It holds the world still. Churn improves as you find the right customers, conversion improves as the offer sharpens, prices rise. This tool assumes none of that, because modelling it would mean inventing numbers you have not earned yet.
It cannot model your actual business. Three clean models, one at a time. Real companies run a retainer alongside a product, or a free tier under a paid one, and the interesting economics usually live in the seam between them.
If you take one thing from it, take the ceiling. Customers you win each month, multiplied by how many months they stay. That caps your business no matter how long you wait, most founders have never calculated it, and it is why plans that looked fine on a spreadsheet flatten out in year two. Most of the rest is arithmetic you could do yourself.
Everything here is yours. No benchmarks, no industry averages, nothing stored, sent, or tracked: it runs entirely in your browser and the share link simply packs your answers into the URL. The presets are labelled starting points, not research. It is a guide, and it is free. It is not advice and it is not a forecast.