Tactical insights for first-time founders to outsmart the burn, the churn & the breakdown.
Hey Founder,
You rarely lose money in one big move.
It slips away in the quiet stuff, the assumptions no one questions.
One I see constantly?
A “Cost of Revenue” line that’s empty, vague, or shoved into OPEX.
That line (often ignored) hides your most expensive operational leaks.
But here’s the flip: it’s also your biggest lever for margin and growth.
Let me show you how to spot the red flags and turn them into real financial clarity.
Cost of Revenue / COGS: Cost of Goods Sold = total direct cost of delivering your product or service— everything directly needed to serve your customers, before overheads, taxes, or running costs.
The Margin
Devil Is In The Detail
Most founders blame margins on salaries or rent.
But it’s the quiet, recurring stuff that drains you: failed deliveries, cancellations, packaging, ops friction.
I’ve seen this pattern over and over:
🛒 Webvan scaled fast, but every grocery order lost money. Costs were buried as “overhead.”
🧹 Homejoy ignored refund and churn rates. Looked great. Burned out.
📦 Blue Apron’s shipping costs exploded as they scaled. Margins collapsed.
👗 ThredUp looked digital, but cleaning, sorting, and photographing every item added hidden costs that killed the model.
Each story? Same root cause.
They underestimated the Cost of Revenue.
And ignored what happens when “tiny” costs scale.
Why You Should Care
Know what actually makes money: Break down margins by product, customer, or channel - so you double down on what works, and cut what quietly drains you.
Spot the blind spots: If support, refunds, or usage fees stay hidden, you’ll miss the leaks. That “top customer”? Might be your biggest loss.
Scale the right stuff: Growth isn’t more sales. It’s more of what’s profitable. Clean Cost of Revenue data helps you scale with precision.
Cost Drivers 101: Spot the Margin Killers
Whether you’re SaaS, eCom, or services, your goal is the same: stop margin leaks.
Use the tables below to anchor your model in reality.
Forget the debates on where support costs go. What matters is tracking the right costs in the right place, early.
The clearer your Cost of Revenue, the steadier your cash flow (and your stress levels).
Forget the debates on where support costs go. What matters is tracking the right costs in the right place, early.
The clearer your Cost of Revenue, the steadier your cash flow (and your stress levels).
Tiny Reframe
“My accountant tracks that” is the classic founder trap. Accountants record what happened, not why.
They track receipts. You need to spot patterns.
Margins live (or die) in the details. Your job?
Find what scales profitably and what just scales cost.
Margin Moves to Spot The Bleed
1. Split Fixed vs. Variable Costs
Use a sheet or dashboard:
Fixed: salaries, rent, subscriptions.
Variable: support, cloud, payment fees.
→ Know how your burn behaves as you grow.
2. Flag the Next Price Spike
List each major vendor’s next usage or renewal jump.
Set alerts 60–90 days before to renegotiate or adjust.
3. Track Cost-to-Revenue Ratios
Add metrics like “Hosting / Revenue” to your dashboard.
Trigger alerts if any rise 10–15% MoM, that’s a leak.
4. Run Mini P&Ls by Product or Customer
Break out revenue vs. delivery cost per product or client.
→ A solid overall margin can still hide losers.
5. Review Costs Monthly
Have Finance/Ops flag cost jumps, slow receivables, or sneaky renewals.
Ask for a “what changed?” summary before decisions.
Finally, deploy better systems…
Tough Love Corner
A founder asked:
“I’ve been using the company card for personal stuff, it’s adding up. How do I fix this?”
Let’s be clear: Your business isn’t your piggy bank. It’s an asset. Treat it like one.
Here’s how to draw the line, cleanly:
1. Business Account = Business Only
No groceries, no Netflix, no “I’ll pay it back.” Ops only: vendors, salaries, tools.
2. Set Up a ‘Tax’ Account
Move 15–25% of revenue monthly. It’s not your money, don’t touch it. Thank yourself later.
3. Pay Yourself Properly
Salary: For founders on payroll - clean, predictable, investor-safe.
Owner Draw: For LLCs/solos - flexible, but track it and know your tax hit.
📌 Pick your pay, schedule it, and don’t wing it.
4. Build a Personal Buffer
Keep 2–3 months of expenses on your personal side. No “borrowing” from the business during a crunch.
Clear boundaries = clear decisions.
And your numbers finally start telling the truth.
Got a burning founder question?
Send it my way, just hit reply.
Founder’s Toolbox
Why pitches fail (and a template that will fix yours).
Before you go…
Your P&L isn’t lying, you’re just not asking the right questions.
Profit isn’t a line item. It’s a reflection of how well you deliver, operate, and scale. Fix how you see your margins and you’ll change how you run your business.
That’s the real moat.
See you next Thursday,
— Mariya
What did you think of today’s issue?
Hit reply and let me know. I read every single one (for real).
About me
Hey, I’m Mariya, a startup CFO and founder of FounderFirst. After 10 years working alongside founders at early and growth-stage startups, I know how tough it is to make the right calls when resources are tight and the stakes are high. I started this newsletter to share the practical playbook I wish every founder had from day one, packed with lessons I’ve learned (and mistakes I’ve made) helping teams scale.
