I Approved €40,000 a Month Without Doing the Maths

One company in this story stays unnamed, the same way it stays unnamed in the book. It raised €15 million. On the plan, that was eighteen months of runway. Headwinds turned eighteen months into nine.

The call to the co-founder is the part worth remembering. The line went silent, and then one word came back: “shit.”

The mistake was not the spending

It is tempting to tell this as a story about spending too much. It is not. Plenty of companies spend €40,000 a month on marketing and do fine, because they know what comes back. The mistake here was that nobody put the two numbers side by side before approving it: what a customer was worth over their life, and what it cost to get one.

The honest detail is how ordinary it felt. Approving that spend did not feel like an emergency. It felt like Tuesday.

That is the whole problem with recurring costs. A one-off €40,000 decision gets scrutiny. The same amount, monthly, becomes a line in a spreadsheet that renews itself. Nobody re-decides it. There is no meeting where somebody says “we are about to commit half a million euros over the next year”. There is just a number that was already there last month.

Hope is not a unit economics strategy

The line I keep coming back to is the one that ended up in the book: hope is not a unit economics strategy.

Hope, in practice, looks reasonable. It sounds like “the cost per customer will come down as we scale.” It sounds like “these channels take time to mature.” Sometimes both are true. But if you cannot say what a customer is worth, you are not making a bet on scale. You are making a bet that somebody, later, will discover the numbers work.

What I do differently now

Two things, and neither is complicated.

First, no recurring spend gets renewed without the two numbers written next to it. Not modelled, not projected. What did we pay to acquire customers last month, and what have the customers we acquired six months ago actually paid us since. If either number cannot be produced, the spend pauses until it can.

Second, every recurring commitment gets an expiry date. It does not roll. Somebody has to actively renew it, which forces the conversation that “Tuesday” prevented.

The uncomfortable part of this story is not that the money went. It is that the company had a plan, a board, a budget and competent people, and the decision that cost the most was the one nobody experienced as a decision.

---

Source: the runway story is adapted from the preface to the author’s third book on lifetime value and acquisition cost; the company is deliberately unnamed, as it is in the original. On what changes after a round closes, see Anioł w Piekle*, ch. 7.*