Four and a half per cent of our customers left every month. Everyone in the company could see it. Nobody thought it was a strategy problem, because churn is the thing support apologizes for at the end of a meeting.
Then I did the arithmetic in front of the executive team.
16,825
Not this year. Ever. Lose four and a half per cent a month and that is the roof, whatever you spend on getting new ones.
30,591
Same dashboard. Same number they had been looking at all year.
Nobody argues with multiplication.
Churn stopped being something support apologized for and became the reason to fund the work. Over the next stretch revenue went from $20.5M to $24.4M. Net profit up 251%. Two patents granted.
None of that is why I am telling you this.
I am also the other kind of story.
Years later I was running product at a company doing the same thing to itself. We were bootstrapped. No board. And we priced our work on what it cost us to build, never on what it was worth to the person paying for it.
Some of what we delivered returned many times what we charged for it. I am not able to tell you how many times, and that is the point. Nobody outside the building was ever going to put those two facts on one page and ask the obvious question.
The only person who was going to ask was me. I asked late.
Our three-year plan used one average contract value for every customer we had. But our customers were not one thing.
One group arrived with broken data, so we spent the margin cleaning it and could reuse almost nothing. Another group overlapped enough that work built once could be sold three times. And now and then something landed that was worth a fortune and built nothing we could use again.
Averaging those together gives you a number that describes none of them, and hides the only decision that matters.
So I cut our own three-year plan by a third.
I did it at the point where that number was most expensive to change, in front of people whose opinion of the company depended on it. Nobody made me. That is the expensive part, and it is the only reason the story is worth your time.
That is the whole offer, and I know how it sounds.
I am not selling certainty. I am telling you I will do to your plan what I did to mine: find the number everyone is reading as a win, and say out loud what it actually says.
Six companies have hired me. Four made me Chief Product Officer. Every time, the problem they described on the phone was not the problem they had. I am good at this partly because I have been wrong in the way that costs money, and I remember exactly how it felt.