The Founder's Most Critical Metric: Runway
In the startup world, money isn't just a resource; it's time. Your **Runway** is the number of months your business can survive if your revenue and expenses remain constant.
Gross Burn
The total amount of cash your business spends each month on everything from salaries to server costs.
Net Burn
The actual amount of cash you lose each month after subtracting your revenue from your gross burn.
Are You "Default Alive" or "Default Dead"?
Coined by Paul Graham, these terms help founders understand their current trajectory:
Default Alive
If you reach profitability before your runway ends, you are default alive. You don't *need* more investment to survive. This is the goal.
Default Dead
If your current growth doesn't lead to profitability before you run out of cash, you are default dead. You must either raise more money or cut costs immediately.