The Right Side Has to Pay for the Left
One rule ties the canvas together: what one customer pays has to cover what it costs to serve that customer. Check it on a single customer first, because growth multiplies whatever that number is.
Revenue Streams and Cost Structure share the bottom edge of the page for this reason. Read them together on the unit: one customer, one month, or one order.
MoviePass shows what happens when the unit is negative. In August 2017 it cut its price to $9.95 a month for up to one film a day, and it usually paid cinemas the full ticket price each time a member went. A member who saw two films a month cost more than they paid, so every new active member added to the loss, and the service shut down in September 2019.
If one customer earns you money, more customers cover your fixed costs and then build profit. If one customer loses you money, more customers only make the loss bigger.
Set the price and the cost of serving one customer, then move the number of customers.
At the default settings each customer loses $4, so going from 2,000 to 20,000 customers takes the monthly loss from $11,000 to $83,000. Raise the price above the cost and the same slider starts working for you.
A subscription box charges $30 a month and costs $34 to fill and ship. An investor says doubling the customer base will get it to profit. What will doubling actually do?
Double the losses that come from the boxes themselves, because each one loses $4
Reach profit, because fixed costs are spread over more boxes
Leave the result unchanged, because the loss per box stays the same
Reach profit once suppliers give volume discounts
Each box loses $4 before any fixed cost, so twice the customers means twice the per-box loss on top of the same overheads. Volume only helps once a single customer pays more than they cost. Fixing price, cost or what the box contains has to come first.