B Babelio Playbook 10 / 24
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Operating System · Artifact 10

Financial Model

36-month P&L, cash & runway, and revenue-keyed headcount for an immersion-learner subtitle/dub product. ARPU $12/mo, blended COGS ~$3.26/paid user, LTV:CAC ~3:1. One number decides survival: the audio/OS-internals engineer.

ARPU / mo
$12
Gross margin (Pro)
73%
LTV : CAC
~3:1
CAC payback
4.0mo

Assumptions

The yellow card is the only place you edit. Every table below is derived from these. Re-tune monthly against the usage ledger (tech.md §3) and the Van Westendorp / concierge results (monetization.md §2).

Drivers — edit me monthly source: monetization.md · tech.md §8
ARPU (paid, blended tiers)$12.00 / mo
COGS — dub, per active-hr$0.50
Free → paid conversion (base)8%
COGS — subtitle, per active-hr$0.31
Monthly logo churn (base)7%
Blended COGS / paid user / mo$3.26
CAC (community / content-led)$35
Usage mix (Pro/mo)6 sub-hr + 2 dub-hr
Audio/OS engineer (loaded)$14,000 / mo
Fixed infra (Vercel/Neon/Fly)$0.4–1.2K / mo
Seed raise modeled$1.3M
2nd engineer trigger$10K MRR
The load-bearing cost: one rare hire

AI inference is not the cost that breaks this model — at $0.50/dub-hr and $0.31/subtitle-hr on Cartesia + Deepgram, gross margin holds at ~73% (see tech.md §8). The single line item that dominates burn and gates the entire timeline is the Rust + CoreAudio/WASAPI engineer who builds the per-process audio tap. At $14K/mo fully loaded, this one person is ~70% of R&D spend through Q1–Q3 and the whole moat (native-desktop head-start) rests on them.

If this hire is not committed, the 36-month plan is fiction (REVIEW.md P0, team 0/50). Every scenario below assumes this person is on payroll from Month 1.

Headcount roll-forward

Hiring is revenue-locked, not calendar-locked. Each hire fires on a milestone, not a date. Months are the base-case timing those milestones land. Full detail & scorecards in 11-hiring-plan.html.

Role Revenue trigger Base mo. Loaded $/mo Equity
Founder / CEODay 0M1$0 → $6,000
Audio / OS-internals eng load-bearingPre-MVP (Day 0)M1$14,0001.0–3.0%
Founder salary turns onPost-raiseM7$6,000
2nd engineer (full-stack)$10K MRRM10$12,0000.5–1.0%
Growth / community lead$25K MRRM14$8,0000.3–0.7%
3rd engineer (Windows/edge)$40K MRRM19$11,0000.3–0.6%
Support / CS (part-time)$40K MRRM20$4,000
No-go rule Do not hire sales, a VP of Marketing, or a designer before $40K MRR. This is a community/content-led consumer motion (06-gtm-motion.html) — a sales team pre-PMF burns the runway the engineer needs.

36-month P&L · base case, quarterly

Monthly engine compressed to 12 quarters. Revenue ties exactly to monetization.md §6 (base EoY-1 = $15.4K MRR / $184K ARR). All figures USD. R&D = engineering payroll (the load-bearing line); S&M = CAC × net-new paid + tooling; G&A = infra + billing + ops.

Quarter Q1Q2Q3Q4Q5Q6Q7Q8Q9Q10Q11Q12
Revenue3.1K10.6K22.4K39.1K53.2K65.2K79.3K95.7K114K136K160K187K
COGS (AI + infra/support)0.8K2.9K6.1K10.6K14.4K17.7K21.5K26.0K31.1K36.9K43.5K50.9K
Gross profit2.3K7.8K16.3K28.5K38.7K47.5K57.8K69.7K83.4K99.0K117K136K
S&M9.5K13.5K17.1K22.7K15.0K16.9K18.9K21.2K23.6K26.2K29.0K32.0K
R&D (eng payroll)42K42K60K96K96K96K129K129K129K129K129K129K
G&A4.0K4.3K4.7K5.0K5.4K5.8K6.1K6.5K6.8K7.2K7.6K7.9K
EBITDA-53K-52K-65K-95K-78K-71K-96K-87K-76K-63K-49K-32K
Reading the curve EBITDA dips at Q4 (-$95K) and Q7 (-$96K) — the two engineering hires (2nd eng, 3rd eng), not AI cost. After Q7 the loss shrinks every quarter as gross profit compounds. Base-case EBITDA breakeven lands ~Q14–Q15 (Month 42–45), just past this 36-mo window; the trajectory toward it is the fundable story.

Cash & runway

Modeled on a $1.3M seed (mid of the $1.2–1.5M ask in monetization.md §7). Bars = cash at end of each quarter. The line never crosses zero inside 36 months — the raise funds the full window with ~$481K buffer at Month 36, while burn is already shrinking toward breakeven.

Cash balance, end of quarter — $1.3M seed peak burn ~$32K/mo (Q4)
>12 mo runway raise-again window (6–12 mo) <6 mo — danger
Bootstrap alternative If you don't raise: subtitle COGS (~$0.31/active-hr) keeps a lean path alive. With founder + one engineer only and ~$5–8K/mo burn (no 2nd/3rd eng), breakeven is ~460 paying users (Month 6–7 base) on a ~$120–140K self-funded budget — see monetization.md §7-8. Same revenue engine; the gate is whether the audio engineer joins for equity, not cash.

Unit-economics metrics · computed from the drivers

CAC payback
4.0mo
$35 / ($12 × 73%). Target <12 mo.
LTV
$125
$12 × 73% × (1 / 7% churn). Report ~$120.
LTV : CAC
~3:1
$125 / $35 = 3.6. Capped at ~3:1 (the 5.7:1 NRR error is retracted).
Gross margin
73%
($12 − $3.26) / $12, Pro. Blended ~65–70%.
Monthly churn
7%
Consumer, early. Range 6–8%. The #1 risk.
NDR
~100%
95→105% via metered-dub expansion. Modeled flat until live data.
Magic Number
~1.0
(ΔARR × 4) / prior-Q S&M. Healthy >0.75; recompute on real spend.
Burn Multiple
~1.7
Net burn / net-new ARR, blended Y1–Y2. Target <2 at seed.
Why CAC payback is so good but burn is high Per-customer economics are strong (4-mo payback, 73% GM). Burn is high because of fixed engineering payroll, not bad unit economics. This is a "great margins, expensive to build" profile — the model is gated by the cost of the desktop-audio engineering, exactly the load-bearing line above.

Three scenarios

Same cost structure across all three (the engineer is hired regardless). Only two drivers move: free→paid conversion and monthly churn, plus the size of the community-acquisition funnel.

Conservative

Survive

$201K ARR · M36
  • conv6% free→paid
  • churn8% / mo
  • EoY-1~$4K MRR (~$48K ARR)
  • LTV:CAC~3.0:1

Driver: weak community pull + high consumer churn. Survives only on the bootstrap/lean path — do not staff 2nd/3rd eng. Doesn't impress investors.

Base · plan of record

Fundable

$788K ARR · M36
  • conv8% free→paid
  • churn7% / mo
  • EoY-1$15.4K MRR ($184K ARR)
  • LTV:CAC~3.4:1

Driver: reverse-trial benchmark conversion (8%) + named immersion-learner communities convert as projected. Solid seed metrics; the case we underwrite the $1.3M raise on.

Optimistic

Break out

$2.8M ARR · M36
  • conv11% free→paid
  • churn4% / mo
  • EoY-1~$40K MRR (~$480K ARR)
  • LTV:CAC~4.0:1

Driver: a viral community wedge fires (challenge-kickoff calendar) and metered-dub expansion lifts NDR above 100%. Needs both; treat as upside, not the plan.

Sensitivity & tripwires

Recompute pricing in 05 if any of these fire

Margin tripwire: if blended gross margin falls below 50% — most likely from a shift toward heavy dub-minute usage (a 20-dub-hr/mo user costs ~$10 on a $12 plan) — recompute pricing in 05-pricing.html. The defense is already in place: dub is metered with $0.06/min overage and free dub capped at 15 min; if the meter isn't holding margin, tighten the dub allotment.

Payback tripwire: if CAC payback exceeds 18 months (CAC drifts above ~$157 at current GM, or GM compresses), the community-led acquisition thesis has failed — re-run LTV:CAC on real paid-channel CAC before scaling spend.

The binding constraint is not TTS unit cost. It's two things: (1) consumer churn staying ≤8%/mo, and (2) the unvalidated WTP-ceiling-vs-dub-COGS gap — validate via Van Westendorp + the $5/hr concierge test (monetization.md §2) before scaling dub.

Cross-references
  • tech.md §8COGS source of truth — $0.50 dub / $0.31 subtitle per active-hr (Cartesia + Deepgram).
  • monetization.mdARPU $12, tiers, LTV recompute, 12-mo projection, funding ask ($1.2–1.5M).
  • 11-hiring-plan.htmlRevenue-keyed hire sequence + scorecards. The headcount triggers above map 1:1.
  • 05-pricing.htmlWhere the sensitivity tripwires send you — tiers, meter, overage.
  • 06-gtm-motion.htmlCommunity/content motion that justifies the $35 CAC and the no-sales-team rule.
  • 16-risk-register.htmlChurn and WTP-vs-COGS as P0 risks with tripwire metrics.
Babelio · Financial Model · Playbook 10/24 All figures USD · refresh monthly against the usage ledger