Any time spent planning and refining a product with negative profitability is kinda redundant no?
Disproof
At least a cocktail napkin with some idea of how much net money you could actually make from this
Consequences
The funniest thing would just be to run out of money building something
The saddest thing would be to build something that makes negative money due to operating costs
Causes
Usually happens if the product is disconnected from the P&L
When staff / operating costs are jealously guarded due to wage negotiating drama, making opex forecasts impossible
Skill issue in the person doing the modelling, who failed to grasp (and vet) the cost of actually operating these things
Approaches
It may not be the work of the product team to do the modelling, but they damn well better be pushing for it to happen
Variable costs better be verified by the teams actually generating said costs
If you’ve got a centralised finance team doing the modelling, I guarantee you their actual understanding of the dynamics of how these numbers scale won’t be as accurate as the teams generating revenue and costs
The business viability not only involves the cost to build, but the cost to sell and often the cost to operate
If there’s not a positive number at the end of this, or a number at all, you had better understand where the money is coming from and for how long