1. Revenue Model: Create a 3-year monthly revenue forecast using the initial
assumptions below. If you want to change any of the initial assumptions below, please
explain why. Make any other assumptions you need and explain why.
Initial Assumptions
● 60,000 active customers as of 1/1/2019 in the U.S.
● 10% MoM customer growth rate
● Three pricing tiers (see website for feature details)
o Core: $39 base fee + $6 per employee
o Complete: $39 + $12 per employee
o Concierge: $149 + $12 per employee
● 7.1 person average company size
2. Cash Model: Create a 3-year monthly income statement and cash flow forecast based
on your revenue forecast and the initial assumptions below. Change and/or make any
other assumptions you need to and explain why.
Initial Assumptions
● $100M starting cash balance
● -40% operating margins
● 9 month CAC (revenue basis)
3. Business Model Discussion: Please output key sections of your model into slides
and discuss risks and opportunities that you see. What is the right set of metrics to track
in this business? Please output the selected metrics from your model and discuss
qualitatively what they indicate / what you would focus on to run the business.
4. Additional Product: Please help us think through the opportunity to offer background
checks as part of the platform. Many employers require background checks as part of
employment, and it would streamline the employee offer and onboarding process to be
able to execute this in-app. The app does not have this functionality today.
Starting assumptions
● $20 cost to the company per background check via partner provider
● 80% of customers need background checks
Questions
● How would you decide between pricing this feature a la carte vs. including it in
one of the tier packages (see website)?
● How big is the opportunity? How does this impact the Revenue Model?
● Qualitatively, should the company buy, partner or build this feature?
The HW is to look at the startup company Gusto https://gusto.com/ and the answers needs to be based on the packages/services provided by Gusto.
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