- For startups burning through cash, there are two forms of advice:
- Do whatever it takes to get to profitability
- Do whatever it takes to get to a certain amount of runway
What both of these essentially boil down to is the ability of the captain of the ship to make quick decisions with imperfect information and the ability to ask and answer the right questions given the information available. What do you believe the world will look like for each of the next five quarters? For startups which are burning cash, how much cash do you have? What’s your monthly cash burn at a low revenue level? How many months of cash do you have? How can you cut costs to stay alive for 24 months? How do changing scenarios impact future funding requirements? How can I speed up my next funding round for that cash injection which will keep me afloat?
Answering these questions and taking quick decisions based on your views will be what separates the wheat from the chaff in turbulent times, and given the current global scenario, turbulent times seem like an absolute certainty. Robust decision making processes and high quality information are the weapons of the wise in the times to come.