Innovation Accounting- Financial Modelling that Works for Ventures
summary
Argues that startups must stop inventing single-point ROIs and instead extract funnel rates from storyboards and journey maps, encode them in a spreadsheet, assign per-variable ranges and run Monte Carlo analysis (thousands of runs) to produce a hurricane chart with a 95% confidence interval. Shows examples (a photo-editing app and a restaurant flow), models referral and retention loops, and uses early experiments (ads → visitor conversion checks) to narrow ranges. Claims the method—innovation accounting—turns qualitative assumptions into testable, prioritizable bets.
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chapters (13)
- 0:00Introduction
- 1:50Problem Space
- 2:05Business Case
- 4:00Canvases
- 5:45Business Case Issues
- 9:30Innovation Metrics
- 10:40Language of Numbers
- 16:50Storyboarding and Metrics
- 21:40Pirate Metric Framework
- 29:35From here to spreadsheet
- 30:37Quantifying the model
- 32:22Playing with the model
- 36:20Refine the model
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