Student Field Guide
FounderLab is a live business simulation. Every decision you make — pricing, hiring, marketing, borrowing — has real financial consequences. This guide explains the why behind each feature so you can build strategy, not just click buttons.
Each simulation unit represents one operating period. You submit a single set of decisions covering pricing, marketing spend, R&D, support, and headcount. Think of it as your weekly executive committee meeting — you set direction, and the market responds.
Price
Price is your primary lever for positioning. A higher price signals premium quality but narrows your potential market. A lower price drives volume but compresses your gross margin. In Unit 1 you're constrained to your industry's benchmark range — this mirrors how real startups are anchored by what the market expects. From Unit 2 onwards, you can go anywhere, but straying too far from the benchmark hurts conversion rates.
Real-world connection: Startups often obsess over growth at the expense of margin (think ride-sharing). The simulation forces you to feel the tension — cheap pricing can win customers but destroy your ability to survive a downturn.
Watch your Gross Margin % relative to your industry benchmark in the Financials page. This "Execution Quality" score is a direct multiplier on your revenue. The closer you are to the top quartile, the more the algorithm rewards you.
Marketing Spend
Marketing spend drives new customer acquisition, but it follows diminishing returns. Doubling your budget does not double your customers. Every dollar beyond the efficient range buys less and less. This models the real phenomenon where CAC (Customer Acquisition Cost) rises as you exhaust the easiest channels.
Pouring cash into marketing while understaffed is a trap. If you don't have enough employees to convert and serve the new customers, you'll pay for leads you can't capture — and your conversion rate multiplier drops to 0.7×.
R&D Spend
R&D investment builds product quality over time. Higher quality compounds: better products retain customers longer (lower churn) and support premium pricing. This mirrors the "product-led growth" model where investing in the product itself becomes the marketing engine.
The strategic question R&D forces: are you building a feature factory or a moat? Teams that front-load R&D often outperform in later units when compounding kicks in.
Support Spend & Headcount
Support spend directly reduces churn — it starts at 8% and can be driven down to 2%. In a subscription or repeat-revenue business, churn is the silent killer. Headcount enables you to serve more customers without efficiency losses. Hire too few and conversion suffers; hire too many too fast and payroll destroys your margins.
In the early units, prioritize keeping churn low over acquiring new customers. A leaky bucket is expensive to fill.
Missed deadline? If you don't submit by the deadline, the simulation auto-processes your unit with a default price ($50) and zero spend on marketing, R&D, and support — then applies a 50% penalty to your revenue, gross profit, customers, and valuation. Your costs (payroll, loan repayments) still run at full value. You'll see a red warning banner on your dashboard and a badge on the leaderboard. Submitting even a minimal decision is always better than missing the deadline.
You can edit your decision after submitting, right up until the unit is processed — your latest changes will be included. The Refresh button only counts as a real submission if you've changed at least one field from its default value.
The Underlying Theme
Every feature in FounderLab is designed around a single idea: balance is strategy. The teams that win are rarely the ones who maximized one variable — they're the ones who understood the system and made smart trade-offs under uncertainty. That's what founders and executives do every day.