Great ideas often start as quick sketches, but how do you know if they’re worth pursuing? Napkin Math is a simple yet powerful method for estimating cost, reach, and impact in minutes before investing significant time or resources. This process helps you move from abstract brainstorming to tangible numbers, making decisions faster and securing stakeholder buy-in.
To illustrate, we’ll use food insecurity in Austin, Texas, estimating the feasibility of installing community fridges to improve access to fresh food in food deserts.
Napkin Math: A Step-by-Step Guide
Step 1: Define the Problem
In 1-2 sentences, clearly describe the problem and a rough estimate of its scale. Don't spend more than 5-10 minutes on your first draft!
This step isn’t about deep research—it’s about using information you already have or can find quickly. Google it or even ask ChatGPT. The goal is to base your estimate on readily accessible knowledge, not exhaustive data collection.
Key Questions
- What specific social or community problem are you addressing?
- How widespread is this problem?
- What are the economic or social costs?
Example (Food Insecurity in Austin)
“An estimated 25% of Austin’s population lacks access to fresh food, contributing to Texas ranking 8th in adult obesity. This results in approximately $5M in preventable healthcare costs annually.”
Step 2: Estimate the Solution’s Reach
Determine how many people your solution could realistically impact.
Start with a best-case scenario, then adjust. Think about how many people could benefit if everything goes well, then factor in real-world constraints.
Key Questions
- How many people could your solution serve in a year?
- What percentage of the affected population does that represent?
- How could your solution scale over time?
Example (Food Insecurity in Austin)
“An accessible community fridge could provide fresh food to 2,000 families per month, covering 20% of the population in a food desert. Adding additional community fridges that are stocked consistently could reach 5,000 more families."
Step 3: Assess the Financial Model
Identify key costs and funding sources.
Think in round numbers. Don’t stress over exact figures—just ballpark the big costs and revenue sources so you can quickly spot major financial challenges.
Key Questions
- What are the key costs associated with launching and running this idea?
- What is the estimated cost per person impacted?
- What potential revenue streams exist (grants, donations, service fees, etc.)?
Example (Food Insecurity in Austin)
“Setting up community fridges requires $50,000 for fridges, $30,000 for staffing/maintenance, and $20,000 for food sourcing. With an annual budget of $100,000 and 24,000 resident visits, the cost per resident's visit is approximately $4.”
Step 4: Measure Potential Impact
Estimate the return on investment to help you justify the effort to start and potentially scale.
Frame impact in terms of savings or growth. People care about reducing costs or increasing value, so try estimating how your solution affects money, time, or well-being.
Key Questions
- How do you quantify the benefits of your solution?
- How will funders and stakeholders benefit?
- How long will it take to see measurable results?
Example (Food Insecurity in Austin)
“For every $1 invested, we estimate $3 in healthcare cost savings due to improved nutrition and reduced obesity-related levels in the community.”
Step 5: Identify Key Assumptions & Risks
Identify key assumptions and external factors that could impact feasibility.
Ask yourself, “What could go wrong?” This isn’t about being negative—it’s about knowing which parts of your estimate need testing or adjusting over time.
Key Questions
- What assumptions are baked into your estimates?
- What external factors could impact feasibility (policy, market shifts, competition, etc.)?
- What is the margin of error in your estimates?
Example (Food Insecurity in Austin)
“We assume 70% of target families will use the fridges weekly and that food costs will continue rising. Policy changes in food assistance programs could also affect usage rates.”
The 30-Second Feasibility Test
Summarize your rough estimates into a single, testable statement:
“If we invest [estimated cost], we can reach [estimated number of people], which would generate [estimated impact] in [timeframe].”
Example (Food Insecurity in Austin)
“If we invest $100,000 in Austin food desert communities, we can reach 5,000 families, reducing food insecurity by 20% within two years.”
From Quick Math to Real Action
Simple calculations can help you take the first steps toward making more informed decisions without getting stuck in analysis.
Before building a robust business model around your idea, share the back of your napkin with a peer for feedback, refine it with lightweight research, and then test a small experiment against your estimates.
Learn more.
