Burn Rate: Survival Math

THE BRUTAL REALITY: THE CLOCK IS TICKING

If you are losing $50k a month and have $200k in the bank, you don't have a "startup." You have a 4-month-long explosion.

The Conflict: Founders treat "Burn Rate" as a badge of honor. It isn't. It's a wound.

The Truth: Cash is oxygen. When it runs out, the brain stops working. You stop being a CEO and start being a beggar.

The Fix: You must become "Default Alive." Profitability before the cash ends.

1. DEFAULT ALIVE VS DEFAULT DEAD

If you stay on your current path, do you make it to the shore before you run out of air? If no, you are Default Dead. You must cut costs or pivot *today*.

2. THE PAYBACK PERIOD

How many months does it take for a customer to pay back what it cost to acquire them? If it takes 24 months but your runway is 12, you will go bankrupt while growing.

SMART WORDS

RUNWAY

The "Timer." Exactly how many months you have before the bank account hits zero.

CAC (Customer Acquisition Cost)

The "Cost of a Customer." How much you spend on ads and sales to get one person to pay.

CHURN

The "Leaky Bucket." The percentage of customers who quit your service every month.

TACTICAL DIRECTIVES

1. The Countdown: Calculate your "Months to Zero" right now.

2. The Hiring Freeze: If your runway is less than 6 months, stop hiring immediately.

3. The Upfront Strategy: Change your pricing to annual-upfront to get cash today instead of next year.