Pathwright: They Found Out If They Were Profitable Once a Year. At Tax Time.

The Challenge

Pathwright had built something people loved—a learning experience platform used by organizations to create beautiful, effective courses. The product was strong. The customers were happy. The team was talented.

But the founders had a problem they couldn't see: they didn't know if any of it was working financially.

Revenue and profit? They found out once a year. When they filed taxes.

No monthly close. No unit economics. No visibility into which customers were profitable or which product lines made sense. Growth felt good, but nobody could prove it was actually creating value.

Worse: the business model was fragile. Nearly 50% of development was customer-funded—building features for specific clients rather than investing in the platform. Every new customer required custom work. The team was busy, but the business wasn't compounding.

The founders knew something had to change. They just couldn't see what.

The Solution

Pathwright partnered with Financial Rhythms to build financial infrastructure from scratch and transform the business model for sustainable, profitable growth:

Foundation: From Annual Surprise to Monthly Rhythm

• Built budgeting, forecasting, and monthly business review functions from zero
• Implemented monthly close process—first time the founders saw real numbers more than once a year
• Created financial reporting that leadership actually used to make decisions

Planning: Unit Economics That Drive Strategy

• Developed customer-level profitability analysis for the first time
• Identified which customer segments created value vs. consumed resources
• Built 13-week cash visibility and scenario planning for a bootstrapped company with no margin for error

Intelligence: Product-Led Growth Strategy

• Diagnosed the customer-funded development trap—50% of engineering serving one-off requests
• Designed bundled offering: learning design services + platform subscription
• Increased customer LTV 2-5x by shifting from project work to recurring relationships
• Transformed business model from custom development dependency to platform-first profitability

Financial Optimization

• Implemented tax strategy that tripled shareholder returns through growth, economies of scale, and optimization
• Shifted from customer-funded development to full profitability and earnings reinvestment
• Built sustainable capital allocation model for a bootstrapped company