{
 "id": "13.10",
 "title": "Financial model",
 "department": "Finance",
 "department_slug": "finance",
 "direction": null,
 "branded": false,
 "status": "needs-you",
 "owner": "Param",
 "last_verified": "Mon Oct 26",
 "holds": "Pricing, costs and growth tied together",
 "urls": {
  "html": "https://handbook.joinsquareup.com/finance/financial-model",
  "markdown": "https://handbook.joinsquareup.com/finance/financial-model.md",
  "json": "https://handbook.joinsquareup.com/finance/financial-model.json"
 },
 "other_directions": [],
 "tldr": {
  "headline": "One model tying price, cost and growth, with the unknowns left blank",
  "points": [
   {
    "icon": "chart",
    "text": "Seven formulas run from paying brands through margin, burn and runway."
   },
   {
    "icon": "money",
    "text": "At $79 a plan, brain cost of $15 leaves about 81% margin."
   },
   {
    "icon": "warn",
    "text": "At the caps' ceiling of $180, the same brand loses $101 a month."
   },
   {
    "icon": "people",
    "text": "Growth, churn, fixed costs and cash have no figure in any source."
   },
   {
    "icon": "eye",
    "text": "Only a measured month closes the gap between those two costs."
   }
  ],
  "stat": {
   "value": "81",
   "label": "margin percent, low cost case"
  },
  "decide": "Model 5, 15 and 30 new trials a month, and use $45 cost per brand until measured?",
  "mood": "building"
 },
 "sources": [
  "brew working tree docs/pricing.md:20-43, untracked",
  "brew origin/main a559de6: rewrite-pot.js:19-24, public/demo-picker.html:201",
  "handbook content/finance/unit-economics.md, content/finance/revenue-plan.md, content/finance/budget.md, content/ai-and-models/cost-per-brand.md",
  "memory: brew-gemini-provider, brew-model-compare-2026-10-20, brew-pricing-parked"
 ],
 "open_questions": [
  "**Growth inputs.** Proposal: model three cases of 5, 15 and 30 new trials a month with a 30% trial to paid rate and 5% monthly churn, labelled projections, until the first real month replaces them.",
  "**Cost per brand input.** Proposal: use $45 until three partners have one measured month.",
  "**Fixed costs and cash.** Proposal: Param enters salaries, tools and cash privately in the sheet; this page shows only the runway.",
  "**Who owns the sheet?** Proposal: Sai builds it, Param reviews it monthly with the investor update."
 ],
 "parts": {
  "Answer": "How pricing, costs and growth tie together into one model; no model exists, so this page sets out its drivers, its formulas and one worked example on the proposed prices, every figure marked a projection, and Param supplies the growth and cost inputs that have no source.",
  "Today": "### Inputs with a source\n\n| Input | Value | Source |\n|---|---|---|\n| v1 plan | $79 or ₹4,999 a month | [src: brew working tree docs/pricing.md:20] |\n| Wallet added by the plan | $12 a month | [src: brew working tree docs/pricing.md:21] |\n| Brain cost estimate per brand | about $15 in v1, $45 in v4 | [src: brew working tree docs/pricing.md:23] |\n| Allowed cost per brand before drafts | up to about $180 a month, proposed | [src: content/ai-and-models/cost-per-brand.md Numbers] |\n| First build of every Play | about $18 on Pro, proposed; about $80 for a full demo build | [src: content/ai-and-models/cost-per-brand.md Numbers] [src: brew/public/demo-picker.html:201] |\n| Play rewrite estimate | $0.40 on Pro, plus about 1.5 times overhead | [src: brew/rewrite-pot.js:19-24] |\n| Google credits left | $20,763 on 16 Oct | [src: memory brew-gemini-provider] |\n| Partners after the partnership | $79 for life, proposed | [src: brew working tree docs/pricing.md:41] |",
  "Tomorrow": "| Item | Version | Tag |\n|---|---|---|\n| A sheet with the drivers below, monthly for 24 months | v1 | New |\n| Measured cost per brand replaces the estimate | v1 | Changes |\n| Version prices and autopilot added as each version ships | v2 to v4 | New |",
  "How we do it": "### Inputs with no source\n\n| Input | Needed for |\n|---|---|\n| New brands a month | Growth |\n| Trial to paid rate | Growth |\n| Monthly churn | Growth |\n| Wallet spend per brand a month | Revenue |\n| Fixed costs: people, tools, cloud base | Burn |\n| Cash in bank | Runway |\n\nThese have no figure in any source [src: content/finance/revenue-plan.md Today] [src: content/finance/budget.md Today].\n\n### The formulas\n\n1. Paying brands this month = paying brands last month × the share kept, plus new trials × trial to paid.\n2. Plan revenue = paying brands × the plan price for their version.\n3. Wallet revenue = paying brands × wallet spend per brand.\n4. Variable cost = paying and trial brands × cost per brand, plus first builds × first build cost.\n5. Gross margin = plan revenue plus wallet revenue, less variable cost.\n6. Burn = fixed costs plus variable cost, less revenue, less credit drawn.\n7. Runway = cash ÷ burn.\n\n### A worked example, a projection, not a promise\n\nOne v1 brand a month on the proposal's numbers:\n\n| Line | Low cost case | High cost case |\n|---|---|---|\n| Plan | $79 | $79 |\n| Brain cost | $15, the spec's estimate | $180, the caps' ceiling |\n| Gross margin before wallet | $64, about 81% | minus $101 |\n\nThe gap between the two columns is the single most important unknown in the model, and only a measured month closes it.",
  "Numbers": "| Metric | Definition | Where measured | Status |\n|---|---|---|---|\n| Gross margin per brand | As in formula 5, per brand | The model sheet | Proposed |\n| Burn a month | As in formula 6 | Spend ledger plus the sheet | Proposed |\n| Runway in months | As in formula 7 | The sheet | Proposed, no cash figure |\n| Credit runway | Credits left ÷ credit drawn a month | Cloud Billing credits | Proposed |",
  "Open": "1. **Growth inputs.** Proposal: model three cases of 5, 15 and 30 new trials a month with a 30% trial to paid rate and 5% monthly churn, labelled projections, until the first real month replaces them.\n2. **Cost per brand input.** Proposal: use $45 until three partners have one measured month.\n3. **Fixed costs and cash.** Proposal: Param enters salaries, tools and cash privately in the sheet; this page shows only the runway.\n4. **Who owns the sheet?** Proposal: Sai builds it, Param reviews it monthly with the investor update."
 }
}