Business Architect

Solution

Define top 3 features (not solution details, actual deliverables users interact with).

• Map each feature directly to one of the top 3 problems
• Be specific: "Slack integration" is not a feature; "One-click bulk import of Slack messages into decision log" is a feature
• Note the minimum viable form of each feature (can we launch with 60% of the full vision?)
• Challenge: "What if we launched with only the #1 problem solved?"

Key Metrics

Name THE ONE metric that proves product-market fit at this stage—not the eventual north star, but the signal you'll track obsessively in months 1-3.

• Example for B2B: "Monthly active users" (not DAU, not revenue, not seats)
• Example for marketplace: "Completed transactions per week" (not listings, not sign-ups)
• Example for SaaS: "Churn rate by cohort" (not total users, not gross revenue)
• Call out vanity metrics to avoid: growth that doesn't translate to revenue, free users, referral spam
• Define: What's the success threshold at 3 months? Be concrete: "50 MAU" not "high engagement"

Unfair Advantage

What will genuinely prevent competitors from replicating your success? Be brutal.

• "First mover advantage" is not an advantage (competitors catch up)
• "Network effects" only count if you have critical mass (0 users = 0 network)
• "Founder expertise" is weak; "founding team previously scaled a $50M+ business in this space" is stronger
• Real advantages: exclusive partnerships, proprietary data, unique technical capability, regulatory moat, brand loyalty (only if earned)
• If you can't name 1-2 real advantages, that's a red flag—note it

Channels

Name 3-4 specific acquisition channels with concrete reasoning.

• Not "social media" or "marketing"—be specific: "Twitter outreach to indie hackers," "ProductHunt launch," "Direct outreach to 50 target companies," "SEO for 'X + Y' keywords"
• For each channel, estimate: early-stage CAC, realistic monthly volume, and why it fits your customer segment
• Identify which channels are fastest to validate (usually 1-2 can start in week 1)
• Note: cost-per-customer, not total cost

Customer Segments

Describe the early adopter profile in extreme detail (not just "SMBs" or "freelancers").

• Age range / career level / company size / revenue / pain point intensity
• Where do they hang out? (Slack communities, forums, subreddits, conferences)
• What's their budget for solving this problem? (This informs pricing strategy)
• How do they currently solve it? (Manual workarounds count)
• Early adopter quirk: they're willing to accept a rough product if it saves them time/money. Who are these people?

Cost Structure

Build an honest monthly burn estimate.

• Infrastructure: AWS/Vercel/Heroku/hosting costs
• Tools & services: payment processing, analytics, CRM, design tools, etc. (itemize all subscriptions)
• People (if any): full salaries or contractor costs for developers, designers, marketers
• Founder opportunity cost: What's the market rate for your role? If you'd earn $150K as an engineer, that's $12.5K/month cost
• Other: legal, accounting, customer support time
• Be conservative; assume 50% of estimates as "surprise costs"
• Monthly total: This is your real runway clock

Revenue Streams

How does money actually flow into the business?

• Subscription (SaaS): monthly, annual, or both? Tiered pricing?
• Transaction fee (marketplace, payments): % of transaction or flat fee?
• Freemium: what's the conversion rate assumption from free to paid?
• One-time: licensing, setup fee, or upfront purchase?
• B2B services: retainer, hourly, project-based?
• Be clear: if you're counting on premium features or upsell, when does that realistically happen?

Unique Value Proposition (UVP)

Write one sentence a customer would repeat to a friend.

• Not: "The fastest, easiest, most affordable solution"
• Yes: "Slack-native task manager that reduces context switching by 80%"
• Yes: "Marketplace for short-term rentals where hosts get pre-vetted guests in 24 hours"
• The UVP should reflect the problem, the segment, and the benefit—all in one breath

3. Unit Economics

Unit economics define whether your business model works on a per-customer basis.

Customer Acquisition Cost (CAC)

• Estimate per-channel CAC: How much do you spend (time + money) to acquire one paying customer?
• If you're doing direct outreach to 100 companies and close 1, and that takes you 40 hours at your opportunity cost, CAC = (40 × $150/hr) / 1 = $6,000
• If you spend $500/month on ads and land 10 customers, CAC = $500/10 = $50
• Range likely spans from $50 to $5,000+ depending on channel and segment
• Rank channels by CAC efficiency

Lifetime Value (LTV)

• Average monthly revenue per customer (ARPU): How much do they pay per month?
• Gross margin: What % of revenue is profit after direct costs? (hosting, payment processing, cost of goods)
• Customer lifespan (months): How long does a customer stay? For SaaS, assume 12-24 months initially; for marketplaces, shorter
• LTV formula: (ARPU × Gross Margin × Customer Lifespan)
• Example: $50 ARPU × 70% margin × 18 months = $630 LTV
• Conservative estimate: Assume 50% churn after 6 months, not the rosy case

LTV:CAC Ratio

• Calculate: LTV ÷ CAC
• Rule of thumb: LTV:CAC should be 3:1 or better for healthy SaaS (3:1 is breakeven considering sales/ops costs)
• Example: $630 LTV ÷ $100 CAC = 6.3:1 (healthy)
• If ratio is below 3:1, either your CAC is too high or your LTV too low—flag this as a risk

Payback Period

• How many months until you recover the CAC from customer revenue?
• Formula: CAC ÷ (ARPU × Gross Margin)
• Example: $100 CAC ÷ ($50 × 0.70) = 2.86 months
• Target: Payback under 12 months (ideally under 6 for startups)

Gross Margin Projection

• Month 1: Likely negative or thin (you're figuring things out)
• Month 6: As you find patterns, can you reduce friction/cost per customer?
• Month 12: What's the sustainable gross margin? (80%+ for SaaS, 20-40% for marketplaces, 40-60% for services)

4. Revenue Model

Define exactly how money enters the business.

Pricing Strategy

• Model 2-3 tiers if B2B SaaS: starter ($10-50), growth ($100-500), enterprise (custom)
• If B2C SaaS or freemium: free tier (do you have one? why?), paid tier ($1-20/month)
• If marketplace or transaction: % take (15-30% is common) or flat fee per transaction
• Competitive benchmark: from MARKET-INTEL.md, where do you sit? Higher (premium), same, or lower (competitive)?
• Customer tolerance: Would a user pay $30/month for a feature that saves them $100+/month in time? (Yes → charge based on value, not cost)

Revenue Projections

Build month 1, 3, 6, 12 projections with conservative and optimistic cases.

Conservative case:

• Assume 30-50% of your channel/customer targets materialize
• Month 1: Likely $0-100 (you're still figuring things out)
• Month 3: ~10 customers × $30 ARPU = $300/month
• Month 6: ~30 customers × $30 ARPU = $900/month
• Month 12: ~80 customers × $30 ARPU = $2,400/month

Optimistic case:

• Assume your channels work, retention is strong, word-of-mouth kicks in
• Month 1: $200 (early adopters arrive fast)
• Month 3: $2,000 (one channel performs well)
• Month 6: $6,000 (two channels active, some expansion revenue)
• Month 12: $15,000+ (network effects or viral growth starting)

Note: Most startups fall between conservative and optimistic—be honest about headroom.

Break-Even Analysis

• At what monthly revenue do you cover your cost structure?
• Example: If burn is $2,500/month, and ARPU is $50 with 70% margin, you need 71 customers to break even
• When do you hit that? Month 6? Month 18? Flag if it looks unrealistic
• Path to profitability: Do you hit ramen profitability (low revenue covers founder living expenses) before Series A?

5. Financial Projections

Combine unit economics and revenue to build a realistic financial picture.

Monthly Burn Rate

• List every cost from Cost Structure (infrastructure, tools, founder time, etc.)
• Months 1-3: Likely higher (setup, learning)
• Months 4-12: Should decline slightly as efficiency improves
• Include contingency: add 20% buffer for unknown costs

Runway Calculation

• If founder has $50K saved and burn is $3K/month, runway is ~16 months
• If you're seeking funding, how much and by when?
• Flag: Can you reach profitability or a funding milestone before runway expires?

Revenue Milestones

• Month where you hit first $1K MRR
• Month where you hit $10K MRR (often a Series A milestone)
• Month where you hit break-even
• Customer milestones: 10, 50, 100, 500 customers

"Ramen Profitable" Threshold

• What's the minimum monthly revenue where the founder can live on ramen (assume $2K/month living expenses for lean startup)?
• Example: If burn including founder time is $5K/month, you need $5K MRR to survive indefinitely
• Flag: If ramen profitability is >18 months away, funding is essential

6. Risk Register

Name your top 5 business risks. For each, estimate likelihood (L), impact (I), and mitigation.

Risk Format

1. Risk Name — [1-2 sentence description]
   • Likelihood: High / Medium / Low
   • Impact: Critical / Major / Moderate
   • Priority: L × I (High×Critical = 1, etc.)
   • Mitigation: What will you test first to validate/de-risk this?

Common Business Risks to Consider

• Market risk: "Target market isn't willing to pay for a solution; they'll always use free workarounds"
• Competition risk: "Established competitor enters the market or a new player with more capital"
• Customer acquisition risk: "Chosen channels don't work; CAC much higher than estimated"
• Retention risk: "Churn is higher than 50% monthly; customers only use product once"
• Founder risk: "Key founder burns out or departs; knowledge loss"
• Funding risk: "Can't raise capital when needed; runway expires before profitability"
• Regulatory risk: "Unexpected legal/compliance requirements emerge"
• Product risk: "Technical complexity is 3x worse than estimated; MVP takes 6 months"

Example Risk Register:

1. Market Acceptance — Busy managers won't adopt yet another tool
   - Likelihood: High (crowded space, switching costs high)
   - Impact: Critical (no customers = no revenue)
   - Priority: 1 (top)
   - Mitigation: Get 5 early adopter commitments in writing (pre-sales) before building

2. CAC Too High — Social media ads cost $500+ per customer in target segment
   - Likelihood: Medium (ads expensive, but direct outreach might work)
   - Impact: Major (LTV:CAC < 3:1, not viable)
   - Priority: 2
   - Mitigation: Test direct outreach to 20 target managers before scaling paid ads

Output Format

Generate BUSINESS-MODEL.md with the following structure:

# Business Model: [Company Name]

## Lean Canvas

[9 cells, each 2-5 sentences, concrete and challenged]

## Unit Economics

**Customer Acquisition Cost (CAC):** [per channel with breakdown]
**Lifetime Value (LTV):** [with assumptions]
**LTV:CAC Ratio:** [current and target]
**Payback Period:** [months]
**Gross Margin Projection:** [month 1, 6, 12]

## Revenue Model

**Pricing Strategy:** [tiers/positioning vs. competitors]
**Revenue Projections:**
- Conservative: Month 1/3/6/12
- Optimistic: Month 1/3/6/12

**Break-Even Analysis:** [customers needed, months to break-even]

## Financial Projections

**Monthly Burn Rate:** [itemized, months 1-12]
**Runway:** [if funded, how long does it last?]
**Revenue Milestones:** [1K MRR, 10K MRR, break-even, customer milestones]
**Ramen Profitability Threshold:** [revenue needed]

## Risk Register

[Top 5 risks with likelihood, impact, priority, mitigation]

---

**Last Updated:** [date]
**Status:** [Draft / Validated / In Execution]

Tips for Success

• Challenge every assumption: If you can't cite market evidence for an estimate, it's a guess. Flag it.
• Be honest about weaknesses: "We don't know how to reach customers yet" is better than a made-up channel plan.
• Use the Risk Register as your roadmap: Pick the top 3 risks and make them testable. That's what you validate next.
• Revisit monthly: Business models are living documents. Update as you learn.
• Default to boring, proven models: Subscription is easier than marketplace. B2B is more predictable than B2C. Solve this correctly before chasing innovation in monetization.

Trigger Phrases

Use this skill when the user asks:

• "What's our business model?"
• "Build me a lean canvas"
• "What are our unit economics?"
• "How will we make money?"
• "Should we charge per user or per transaction?"
• "When will we break even?"
• "What are our biggest business risks?"