Cash Flow Is King - Design the Product Around the Price
This week, I had the privilege to sit in a Stanford lecture by one of the most experienced and grounded investors I’ve met — from Ulu Ventures. It was a refreshing wake-up call to all founders in the room: entrepreneurs don’t fail because the idea is bad. They fail because the cash runs dry while the team is still guessing.
And that message resonated deeply with me — not only as a business coach working with passion-driven founders — but as a former founder who has personally lived the “cash burns faster than hope” journey.
The business model is not a slide. It is how your company creates cashflow. Without positive cashflow — or a clear path to it — a startup is not a business. It is an experiment with an expiration date.
This is where I challenge founders — with both love and honesty — to flip the process. Build your business model before you build your product.
The right sequence is simple:
Price → Unit Economics → Sales Capacity → Product
Design the product around the price — and around what customers are willing to pay today. Not what you hope they may pay in three years.
Before building anything, validate four things:
First, what do customers truly value? Not what sounds nice in an interview — but what they will actively budget for because it is urgent, critical, and high-priority.
Second, what is their willingness to pay for that value? Ask directly: would you buy this for $X? Why or why not? The “why” matters more than the number. That’s where truth lives.
Third, can you deliver that value for less than what they are willing to pay? Only then do you have positive unit economics. Otherwise you’re fundraising for every unit sold — which is a fast path to the startup graveyard.
Fourth, can you sell enough — fast enough — to cover fixed costs like marketing, sales, engineering, operations? Healthy margins must pay for your growth, not miracles.
Cashflow is the only KPI that doesn’t lie. Revenue can be discounted. Profit can be engineered. Cash is reality.
As I often tell my clients: runway is not the number of months left in the bank. Runway is your confidence in future cashflows.
A scalable business model is simple, robust, predictable, aligned with customer value, and ultimately self-funding. It allows you to plan with courage instead of fear.
We are out of time to build products based on wishful thinking. Today’s winners design the business model first. They price value accurately. They build only what delivers that value efficiently. They know how many customers they must close — and by when — to turn cash positive.
Cash doesn’t lie. Design for cash first. Then design everything else.
For founders who want to build smarter — not harder — let’s talk. I help entrepreneurs unlock real customer value, set pricing that tells the truth, and design business models that generate life-giving cashflow. Reach out if you want guidance to build with both purpose and profitable revenue from the start.