alexe-ev Frame ROI Analysis
Purpose
Help teams build a clear, honest ROI frame for a product investment that can support decision-making and stakeholder communication — without false precision.
Skill type
Conceptual skill with analytical components
Use this skill when
- A product investment needs to be justified with business impact
- Leadership is asking "what's the ROI?" for a feature, initiative, or platform investment
- Multiple investments need to be compared on expected return
- A business case needs a financial framing
Do not use this skill when
- The goal is full financial modeling with detailed P&L (use build-business-case)
- The goal is unit economics analysis (use analyze-unit-economics)
Required inputs
- Investment description (what is being built or bought)
- Estimated investment cost (time, money)
- Expected benefit (what business outcome will this produce)
Optional inputs
- Baseline data (current state without the investment)
- Timeline to value
- Risk factors that could reduce return
- Comparable investments for benchmarking
Upstream context
Works best when:
- Business goals are defined
- Some baseline metrics exist
Downstream handoff
Output can feed:
- build-business-case (ROI frame → business case)
- prioritize-strategic-bets (ROI comparison → bet prioritization)
- align-revenue-strategy (ROI framing → revenue alignment)
Instructions
- Define the investment: what is being spent? (time, money, opportunity cost)
- Define the expected return: what business outcomes will this produce?
- Quantify the return using available data or conservative estimates.
- Calculate simple ROI: (return - cost) / cost, or payback period.
- Build a range: conservative / base / optimistic.
- Identify key assumptions that drive the return.
- Flag the biggest uncertainties.
Output
Provide:
- Investment definition and cost
- Expected return and how it's quantified
- ROI calculation (range: conservative / base / optimistic)
- Key assumptions driving the return
- Payback period or break-even timeline
- Top uncertainties and how to reduce them
- Recommendation: invest / conditional / don't invest
Risks / caveats
- False precision in ROI calculations is worse than ranges with honest uncertainty
- Opportunity costs are real costs — include what you're not building
- Benefits must be traceable to measurable business outcomes, not activity metrics