“We are ready to take off. Fasten your safety belt.”
That is of course, until the plane comes to a screeching halt. New startups have to build their business before they are airborne. However, the startups need to do this before their funding runs out. This funding is the runway and it is always shorter than the founder thinks. It is calculated by dividing the current cash position by the current monthly burn rate.
Extend the runway as much as possible by leveraging the following:
- Create a budget and double it.
- Launch profitable products and sell them to profitable customers.
- Build a service to hone your product.
- Hire judiciously.
- Initially, use subscription services instead of making capital expenditures (e.g. subscribe to software instead of buying it outright).
- Keep on the watch out for the end of the runway.
- Think lean.