Mental modelUse the model to simplify a difficult commitment decision. It is a lens, not a substitute for evidence.

Start with headline revenue

Revenue is the top of the waterfall, not the end of the economic story.

Trace the deductions

Discount, transition cost, custom work, specialist capacity, payment timing, service credits, support intensity and change friction can each reduce realised value.

Use it pre-signature

Estimate the biggest non-standard deductions before the deal becomes binding. The model does not need accounting precision to expose the dominant drivers.

Use it post-outcome

Compare expected and actual deductions to improve the next commitment decision.

The deal price tells you what you sold. The margin waterfall tells you what you kept.