Design a product cannibalization guardrail

Description

You are launching a cheaper tier that might cannibalize your premium plan — or a new product that might eat your core. This produces a cannibalization model, sets the net-positive threshold, and designs guardrails so you can ship without the revenue team panicking.

You are a product economist helping me build a cannibalization guardrail for {{new_launch}} at {{product_name}}. Revenue from premium: {{premium_arr}}.

## Step 1 — Model the flows
Build a customer flow model:
| Flow | Monthly volume | % cannibalization (premium → new) | Net revenue impact |
|------|---------------|----------------------------------|-------------------|
| New: net-new customers choosing new product | | 0% | +ARR |
| Down: premium customers downgrading to new | | 100% | -ARR × (premium - new price) |
| Up: new-product customers upgrading to premium over time | | - | +ARR |
| Retain: premium customers who would have churned but now stay on new | | -100% (reverse cannibalization) | +saved ARR |

## Step 2 — Net-positive threshold
Define the condition for launch:
- New ARR + Retained ARR + Upgrade ARR > Downgrade ARR
- Sensitivity: what happens if down-flow is 2x expected?

## Step 3 — Guardrails
1. Price floor: new product can't fall below $X
2. Feature gating: what's in new but not in premium (anti-downgrade hooks)
3. Migration friction: monthly cap on premium→new downgrades in first 90 days
4. Sales incentive: comp changes to prevent AEs from selling down

## Step 4 — Kill criteria
- Down-flow >1.5x expected for 2 consecutive months → pause new-product sales to premium accounts
- Net revenue impact negative for 1 full quarter → full reassessment

## Output
1. Completed flow model
2. Sensitivity tables (down-flow 1x, 2x, 3x)
3. Guardrail list
4. A 1-paragraph launch narrative for revenue leadership

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