Internal Working Document

Elder Care Platform

Business Economics & Unit Economics Deep Dive

April 2026 — For Internal Use Only

The Economic Thesis

We believe we can scale Family Support Representatives (FSRs) — human specialists who onboard families, resolve escalations, and steward ongoing care relationships — to manage large panels of aging adults through AI and technology. The human touch is critical for a strong business and value proposition — it's our differentiator — but it requires us to scale thoughtfully as an organization.

Panel management at scale: Each FSR manages a panel of 400+ families, supported by AI that handles ~95% of routine coordination — information retrieval, monitoring, alerts, scheduling, and family updates.
Human touch as the differentiator: FSRs build trust through personalized onboarding, handle complex escalations, and conduct quarterly care plan reviews. This human relationship is what families pay for and what competitors can't easily replicate.
AI as the economic driver: Our ability to compress human time per family is what makes the panel model work. Without AI, an FSR handles 30-50 families. With AI, they handle 400+. That's the entire margin story.

The Economics of Panel Management

At $249/month with ~$43 in variable costs, each family contributes $206/month to cover fixed costs and generate profit. The key metric: human time per family per month. If we keep this below 0.10 hours in steady state, the economics are exceptional at any scale.

$206

Contribution Margin / Family

83%

Gross Margin

400+

Families per FSR (AI-enabled)

Fixed Costs vs. Variable Costs

FSRs are variable costs — they scale with families. Fixed costs are the corporate team that exists regardless of family count.

Fixed Costs (don't scale with families)

Engineers $250K · Org mgmt $200K · Ops $110K (1 per 2,500 families)

Role	Ph 1	Ph 2	Ph 3
Engineers	5	6	8
Org management	4	6	8
Operations / admin	1	1	2
Total corporate headcount	10	13	18

	Ph 1	Ph 2	Ph 3
People payroll / mo	$180K	$234K	$318K
Office / infra / mo	$10K	$25K	$40K
Fixed burn / mo	$190K	$259K	$358K
Annual	$2.3M	$3.1M	$4.3M

Variable Costs (scale with each family)

FSR labor allocation	$26.04/family
AI / cloud	$5.00/family
Shared infrastructure	$4.00/family
Payment processing	$7.47/family
Total per family	$42.51/mo

FSRs are variable, not fixed. Each FSR manages 400 families generating $99,600/month in revenue. The FSR costs $10,417/month. That's a 9.6x return on each FSR hire.

How Many Families Cover Fixed Costs?

Each family contributes $206/month after variable costs. The break-even point is: Fixed Costs / $206 contribution margin.

Phase 1

920

families to break even

($190K fixed / $206 margin)

Phase 2

1,255

families to break even

($259K fixed / $206 margin)

Phase 3

1,735

families to break even

($358K fixed / $206 margin)

FSR Capacity & Demand Drivers

An FSR does both jobs — onboarding new families and managing their ongoing panel. We calculate capacity for each demand type separately so we can see which workload is actually driving headcount at any point in the ramp.

Onboarding Demand

Driven by new families per month.

160 hrs/month total · 50% allocated to onboarding = 80 hrs/FSR/mo
At 6 hrs/family → ~13 new families per FSR per month

Onboarding FSRs needed = new families / month ÷ onboarding capacity per FSR

Panel Demand

Driven by total active families and outreach intensity.

80 hrs/FSR/mo for panel · at 8% outreach × 40 min/touch = ~0.053 hrs/family/mo
→ workload supports ~1,500 paneled families per FSR

Panel FSRs needed = active families ÷ binding panel size per FSR

Required FSR pool = whichever demand is binding

Under a cross-trained model, we size the pool to the larger of the two demands rather than adding them. During growth phases, onboarding throughput is typically the binding constraint. As the installed base grows, panel demand can overtake it — and that crossover is where AI tooling (reducing panel demand hours per family) creates the most leverage.

New / Month	Onboarding FSRs needed	Active Families (M12)	Panel FSRs needed	Required FSR pool
75	3	~800	2	5
150	6	~2,250	6	12
250	10	~4,450	11	21
500	19	~9,500	24	43

250 new/month (highlighted) is our Phase 3 target. Active family count assumes 2% monthly churn and ramp-up. Panel FSRs needed calculated at 8% outreach × 40 min handle time.

Execution Plan

What We're Building

By Year 3, we have a choice: stay lean and profitable, or accelerate with health plan partners toward 10K+ families.

Year 1

Product-market fit.
~800 families. Prove onboarding. Validate churn.

15 people
5 eng, 4 mgmt, 5 FSRs, 1 ops

Annualized Revenue$2.7M

Recurring$2.2M

Onboarding fees$450K

Annualized Costs$3.1M

Fixed$2.3M

Variable$814K

Net Income($413K)

Year 2

Hit profitability.
~2,250 families. Refine operations. Prove unit economics.

25 people
6 eng, 6 mgmt, 12 FSRs, 1 ops

Annualized Revenue$7.3M

Recurring$6.4M

Onboarding fees$900K

Annualized Costs$5.0M

Fixed$3.1M

Variable$1.9M

Net Income$2.3M

Year 3

Scale & cash generation.
~4,455 families. Ready for partnerships.

40 people
8 eng, 8 mgmt, 22 FSRs, 1 ops

Annualized Revenue$14.3M

Recurring$12.8M

Onboarding fees$1.5M

Annualized Costs$7.8M

Fixed$4.3M

Variable$3.5M

Net Income$6.5M

Funding the First Three Years

Cumulative cash position by month. Peak capital need: $1.25M. Self-funded path is viable with disciplined hiring.

CUMULATIVE CASH POSITION ($K)

$0

-$750K

M6

-$1.15M

M12

-$1.14M

M18

-$170K

M24

+$1.7M

M30

+$4.35M

M36

$1.25M

Peak Capital Need

Around month 12-18

M16

Monthly Break-even

Operating cash flow positive

~M24

Cumulative Cash-Positive

Total investment recovered

Self-funded path is viable with disciplined hiring. If we raise, it's for acceleration (faster hiring, marketing spend) rather than survival. The business generates cash well before we run out.

What Moves the Needle Most

1 Price Sensitivity

Price	Contrib. Margin	Break-even Families
$199/mo	$156.49 (79%)	973
$249/mo	$206.49 (83%)	730
$299/mo	$256.49 (86%)	590

$50 price change = ~$500K annual impact at 1,000 families

2 Onboarding Hours

Hours	Onb. FSRs @ 250/mo	Annual Cost Delta
3 hrs	5 FSRs	-$625K
6 hrs (baseline)	10 FSRs	—
8 hrs	13 FSRs	+$375K

Highest ROI lever. Directly determines onboarding team size.

3 Panel Size (Service FSRs)

Panel	FSR Alloc. / Family	Contrib. Margin
300 families	$34.72	$197.81 (79%)
400 families	$26.04	$206.49 (83%)
600 families	$17.36	$215.17 (86%)

AI improvements directly expand panel capacity over time.

4 Churn Rate Impact

Monthly Churn	LTV	Yr 3 Active
1.5%	$13,766	~5,100
2.0% (baseline)	$10,324	~4,455
2.5%	$8,260	~3,940

0.5% churn change = ~$2K LTV swing and ~500 family difference at Year 3.

What We Still Need to Validate

These are the assumptions the model is most sensitive to. Each one has a concrete test and a timeline for getting an answer.

Onboarding timelines and panel management demands
How long does it really take to onboard a family? 6 hours is our planning assumption, but AI-guided onboarding (Clicky concept) could cut this to 3. And what does ongoing panel management actually demand? These two numbers drive FSR headcount more than anything else.
What's the real panel capacity?
We think it's closer to 1,000 families per FSR at maturity, not 400. If AI handles 95%+ of routine work, 400 may be far too conservative. We model at 400 to be safe, but the economics improve dramatically at higher capacity. Answerable once we have 1,000+ families and can measure time-per-family empirically.
Price point and pricing structure
Is $249/month the right price? Should we tier it ($79 AI-only / $149 shared FSR / $299 dedicated)? $149 still works (contribution margin: $106, 71%) but requires ~2x the families. Price sensitivity testing is a Year 1 priority.
What's actual voluntary churn once we have real families?
If voluntary churn is near zero, total churn drops to ~1.67% and LTV jumps to $12,389. Need 12+ months of data to measure this reliably.
Are there future health plan or strategic partnerships to explore?
Health plans, Medicare Advantage programs, employer caregiver benefits, and hospital discharge coordination are all potential channels to capture new demand beyond organic growth. These are Year 3+ explorations once we've proven the model.
Can we operate with a leaner org management team?
4 managers at $200K is $800K/year in Phase 1. If AI tools reduce management overhead, we might run with 2-3 initially. This is a real question about org design.

Section II

Three Scales, Three Different Businesses

Each scale is a viable business. The question is which one we're building toward.

Organic

4,500

families

A profitable, founder-controlled company. ~40 people. $13M ARR. Strong cash generation by Year 3.

Mid-Scale

10,000

families

A market leader with health plan partnerships. ~48 people. $30M ARR. Regional expansion.

Enterprise

50-100K

families

A category-defining platform. 200-400 people. $150-300M ARR. National presence.

Organic Business: ~4,500 Families (Year 3)

36-month plan outcome. Self-funded, founder-controlled. Team: 5 eng, 8 mgmt, 22 FSRs, 1 ops = ~40 people.

Line Item	Monthly	Annual
Recurring Revenue	$1,109K	$13.3M
Onboarding Revenue	$125K	$1.5M
Total Revenue	$1,234K	$14.8M

FSR Payroll (22 FSRs)	$229K	$2.75M
Engineering (8)	$167K	$2.0M
Org Management (8)	$133K	$1.6M
Operations (1)	$9K	$110K
Office / Infrastructure	$40K	$480K
AI / Cloud	$22K	$267K
Shared Infrastructure	$18K	$214K
Payment Processing	$33K	$400K
Total Costs	$661K	$7.9M

Net Income	$573K	$6.9M

46%

Net Margin

$1.25M

Capital Required

+$4.35M

Cumulative Cash @ M36

Cost breakdown:
People: 81% of costs
Infrastructure: 10%
Processing: 5%
Office: 6%

Partnership-Accelerated: 10,000 Families (Year 5)

Steady-state P&L. 48 people total. Health plan partnerships drive intake volume above churn replacement.

Line Item	Monthly	Annual
MRR	$2,490K	$29.9M
Onboarding Revenue	$100K	$1.2M
Total Revenue	$2,590K	$31.1M

FSR Payroll (33 FSRs)	$344K	$4.1M
Engineering (8)	$167K	$2.0M
Org Management (5)	$83K	$1.0M
Operations (2)	$18K	$220K
Office / Infra + Overhead	$201K	$2.4M
AI / Cloud + Infra	$90K	$1.1M
Payment Processing	$75K	$896K
Total Costs	$941K	$11.3M

Net Profit	$1,549K	$18.6M

62%

Net Margin

up from 46% at organic scale

Why margin improves from 46% to 62%: Fixed costs (engineering, management) spread across 2.2x more families. Engineering costs are identical at both scales — the same platform serves 4,500 or 10,000 families.

Revenue per employee: $648K (vs. $370K at organic). This is the operating leverage of the AI-first model — revenue scales with families, not headcount.

Enterprise Platform: 50,000 Families

Metric	Value
Monthly Recurring Revenue	$12.45M
Annual Recurring Revenue	$149.4M
Total Monthly Costs	$4.08M
Net Monthly Profit	$8.37M
Net Margin	67.3%

Total Headcount	203
FSRs (125 service + 38 onboarding)	163
Revenue / Employee	$736K

This is a fundamentally different company. 163 FSRs across multiple regions, dedicated HR, training teams, regional management. But the unit economics only get better — margins increase from 62% to 67% due to scale efficiencies.

Scale challenge: At this scale, monthly churn replacement is 1,000 families. You need enterprise sales channels (health plans, Medicare Advantage, large employer programs) to sustain this intake. Direct-to-consumer alone can't fill this pipeline.

FSR BREAKDOWN

125 Service FSRs

38 Onboarding

Economics Across Scale

Metric	5K	10K	25K	50K	100K
ARR	$14.9M	$29.9M	$74.7M	$149.4M	$298.8M
Net Margin	58.6%	62.2%	66.0%	67.3%	67.8%
Total Headcount	27	48	107	203	388
FSRs	17	33	82	163	325
Monthly Profit	$729K	$1.55M	$4.11M	$8.37M	$16.9M
Annual Profit	$8.8M	$18.6M	$49.3M	$100.5M	$202.7M
Revenue / Employee	$553K	$623K	$698K	$736K	$770K

NET MARGIN % BY SCALE

58.6%

5K

62.2%

10K

66.0%

25K

67.3%

50K

67.8%

100K

Margins plateau around 67-68%. The business gets incrementally more efficient but the improvement flattens as variable costs dominate.

What's Different at Each Level

Organic (5K)

Single market / region
Small, elite marketing team using digital tools and AI agents
Engineers build sales pipeline automation — no dedicated sales headcount
FSRs support referral pipeline through family relationships
Small, tight-knit team (~27 people)
Minimal management layers
$553K revenue per employee

Mid-Scale (10-25K)

2-3 markets / regions
1-2 health plan partnerships driving referral volume
Regional FSR managers needed
Dedicated sales & marketing team
HR and training function emerges
QA and compliance processes formalize
$623-698K revenue per employee

Enterprise (50K+)

National / multi-state presence
Multiple health plan contracts
Regional offices and management layers
Dedicated compliance and legal team
FSR career ladder and specialization
Enterprise sales organization
$736-770K revenue per employee

Key insight: The operational complexity inflection point is around 10K families. Below that, you can run with a flat org and founder involvement. Above it, you need middle management, regional structure, and institutional processes. The economics support it — but the company feels very different.

Note on sales: Our model does not include dedicated sales headcount. At the organic stage, growth is driven by digital marketing, AI-powered outreach agents built by our engineering team, and FSRs generating referrals through their family relationships. A dedicated sales function only becomes necessary at the mid-scale level when pursuing health plan partnerships.

What It Costs to Serve One Family

Variable cost breakdown per family per month

$26.04

FSR Labor
Allocation

$5.00

AI &
Cloud

$4.00

Shared
Infra

$7.47

Payment
Processing

$42.51

Total
Variable

$42.51

$206.49 Contribution Margin

Revenue $249.00 − Variable $42.51 = Contribution Margin $206.49 (82.9%)

Cost component detail
FSR labor	$125K / 12 / 400 families = $26.04
AI & cloud compute	$5.00
Shared infrastructure	$4.00
Payment processing (3%)	$7.47
Total variable / family / month	$42.51

The panel size lever: FSR allocation is the biggest variable cost component. Improving panel size from 400 to 600 families/FSR would drop this to $17.36, pushing contribution margin to $215 (86%).

Onboarding: The Moat, The Bottleneck, The Lever

The Cost

6 hours × ($125K ÷ 1,920 work hrs/yr)

$390.63

Labor cost per onboarding

+ $600 acquisition cost*
= $990.63 total CAC

*$600 acquisition cost is a planning estimate — not yet validated. Actual CAC could range from $200 (referral-driven) to $1,500+ (paid digital). This is a key variable to test in Year 1.

The Revenue

$500 onboarding fee collected upfront

~51%

of true cost covered

Remaining $490.63 recovered via subscription margin over ~2.4 months

The Lever

Reducing onboarding from 6 to 3 hours

-5 FSRs

at Phase 3 (250 new/mo)

= $625K/year in salary savings. Halves onboarding headcount.

AI-guided onboarding (Clicky concept) is our single highest-ROI investment. Every hour we shave off onboarding time directly reduces FSR headcount, improves CAC payback, and unlocks faster growth without proportional hiring.

Onboarding Hours	Labor Cost	Total CAC	FSRs @ 250/mo	Annual FSR Cost
3 hrs	$195.31	$795.31	5	$625K
6 hrs (baseline)	$390.63	$990.63	10	$1.25M
8 hrs	$520.83	$1,120.83	13	$1.63M

Churn Is Structural, Not a Product Problem

Monthly Churn: 2.0% (annual: ~21.5%)

1.67% structural

0.33%

Structural (1.67%)	Natural end of ~5-year care journey: death, facility transition, estate resolution
Voluntary (0.33%)	Dissatisfaction, affordability, switching to alternatives

Only 0.33% of monthly churn is within our control. If voluntary churn is near zero, we're doing everything right. We can't prevent aging.

Churn Replacement Demand

Active Families	Lost / Month	Lost / Year	Replace / Mo
1,000	20	240	20
5,000	100	1,200	100
10,000	200	2,400	200
50,000	1,000	12,000	1,000

At 10K families, 200 of every month's onboardings are just replacing churn. Growth requires intake above this replacement floor.

Lifetime Value & Customer Acquisition Economics

$10,324

Lifetime Value (LTV)

Expected total contribution margin per family over their care journey

10.4x

LTV : CAC Ratio

SaaS benchmark is 3x — we're well above that threshold

~5 mo

Payback Period

Months to recover the full cost of acquiring a new family

PAYBACK IN CONTEXT OF CUSTOMER LIFETIME

~5 mo

~45 months of net contribution

The combination of high contribution margin ($206/family/month) and low churn (2% monthly) produces strong unit economics. The LTV:CAC ratio is highly sensitive to actual acquisition cost — our $600 CAC estimate is a planning assumption, not a validated number. Even at $1,500 CAC, the ratio would still be a healthy 4.3x with a ~7 month payback.

Elder Care Platform

Business Economics Working Document

April 2026 — For Internal Use

83%

Contribution Margin

10.4x

LTV:CAC

$14.8M

Year 3 Revenue

46%

Net Margin