The maths isn’t wrong or missing altogether, it’s just incomplete. You failed to account for a major factor impacting this problem
Disproof
Some kind of product lifecycle analysis with clear drivers that are testable
Consequences
Failing to forecast will often result in greenlighting an on-paper profitable product. Said product will massively under-perform or even cost to too much to run, and generally sunk cost fallacy leads to ‘sticking it out’ instead of recognising it for the lost cause it always was
If you’ve over-indexed on the product being successful, you’ll probably be spending more and this will definitely lead to some very unhappy corrections, usually in the form of jobs
Causes
Generally, because anyone looking at costs top-down misses granularity and those looking at costs bottom-up miss context and interaction effects
People most often miss longitudinal things -
How do the financial dynamics of solving this problem evolve over time?
Who else will come into play next year?
What happens if you have to educate the customer?
What happens if customers don’t retain?
Is it possible to oversaturate / are you assuming demand is infinitely scalable? (cough cough Disney)
Hidden costs in customers:
Acquisition
Support
Charge backs
Hidden costs in operations:
Any variable cost as-a-Service infrastructure that doesn’t 1:1 correlate with revenue (e.g. search indexing) in a business model where revenue is fixed recurring
Maintenance
Retraining
Approaches
If the product team is doing the maths, get them help
If the product team isn’t doing the maths, get them involved
Ensure you have enumerated your cost and revenue sources