## The Treadmill of Death
Founders often confuse Monthly Churn with Annual Churn. They look at a "5% Monthly Churn" rate and think that sounds acceptable. They fail to understand exponential mathematical decay. A 5% monthly churn rate means nearly 50% of the customers you acquired in January will have canceled their credit cards by December.
### FAQ
**Q: Why is high churn impossible to out-market?**
A: If you acquire 1,000 users in January at a 6.5% monthly churn rate, you only have 446 users left after a year. This means your marketing team has to spend heavily to acquire 554 net-new users just to get your company's revenue back to *exactly where it started* in January. High churn forces your company onto an accelerating treadmill where every marketing dollar is spent plugging holes instead of generating net-new growth.