Best 11 Quotes & Tweets on Runway

Twitter wisdom in your inbox

1

When interviewing at startups, you should ask hard questions: * What’s your path to profitability? * How much fundraising is required to get there? * How much will employees get diluted? * What’s your burn? * How much runway is left? You are interviewing the company too.

Jeff Morris Jr.

Jeff Morris Jr.

@jmj

2

Low burn rate, rapid progress: excellent! High burn rate, rapid progress: ok Low burn rate, slow progress: ok High burn rate, slow progress: disaster, and now common because "we can always just raise more money"...

Sam Altman

Sam Altman

@sama

3

I’ve never used the term “burn rate” in our business. Terrible phrase. They’re called “costs”. Beware fancy financial terms, they’re commonly used to create unhealthy abstractions. Further, you don’t burn money - you spend money, you pay rent, you invest in people, etc.

Jason Fried

Jason Fried

@jasonfried

4

Don’t call it a burn rate. Call it a spend rate. The money isn’t burning, it’s being spent. Burning suggests it’s a fire that’s roaring out of your control. “We’ve decided to spend $4MM/month on…” is coming to terms with your decisions.

Jason Fried

Jason Fried

@jasonfried

5

When companies talk about burn rates, know two things are burning: Money & people. One you’re burning up, one you’re burning out.

Jason Fried

Jason Fried

@jasonfried

6

Not dying is simple. The formula includes: margins, # of customers, avg customer spend, & retention. Lots of startups spending 3x what they make but aren't getting anywhere to break-even 24 mo later. You cannot hope & pray your way to sustainability unless you're a rocket ship!

Suhail Doshi

Suhail Doshi

@Suhail

7

Early stage startups should probably keep track of two types of runway: * Optimal plan (includes revenue) * Worst case (no new revenue) Be able to execute to take advantage of good opportunity (optimal) but know what happens if it fails— and have a plan B.

Garry Tan

Garry Tan

@garrytan

8

“Runway”, “Accelerator”, “Burn rate”… What’s with the obsession with BURNING in the startup world? How about earning instead?

Jason Fried

Jason Fried

@jasonfried

9

One downside of raising a lot of money pre-launch is it's incredibly easy to tell yourself you're not ready to launch for a litany of product deficiencies while burning cash until it's too late. When you have little money, you often have to launch to get traction to get money.

Suhail Doshi

Suhail Doshi

@Suhail

10

Levers to stretch your runway to 18 months: - Raise a bit more money (flat valuation) - Cut costs (payroll/opex/servers/etc) - Increase gross margin - Call on your debt if you have a line - Lockdown annual deals - Optimize every funnel All models should plan for severe outcomes

Suhail Doshi

Suhail Doshi

@Suhail

11

Raising money feels like treading water. You can do it for a while but you’re always very aware something needs to change eventually... or you’ll die. Holidays make this worse because your burn rate stays the same but productivity tanks!

Sahil Lavingia

Sahil Lavingia

@shl