Runways, burn rate, and what we can learn from Silicon Valley

In the world of start-ups there is this thing called runway burn. I know about this because I’ve been watching the HBO series Silicon Valley. My favourite line from the whole series is “f#%&ing billionaires!”. Not sure it translates with absolutely zero context, but trust me, it was very funny. But I digress.


How it works is a start-up has a certain amount of money in order to take off (the runway), and the faster you spend that money (the burn), the less time you have in order to take off. For example if a start-up has raised a million dollars and is spending $100k a month, they have a 10-month runway – 10 months in which to get something to market and start making revenue. If they don’t start bringing in revenue it’s like a plane getting to the end of the runway without having taken off, not a good look.

So speed is everything. Speed to market, and speed to iterate if something doesn’t work.

I think a thought leaders practice is similar. If someone quits their job and decides to go out on their own running a practice, they might give themselves one year to replace their income – a one-year runway.

People make the mistake of thinking the key to being successful in that year is working out the perfect offering to take to market. It’s not.

The key is being fast enough to get a new offering to market every 90 days … and giving yourself 4 chances to get something working rather than one. Success is much more about speed, and giving yourself lots of chances, than it is about having a high success rate when you do go to market.

I’d love to hear your thoughts – how is your runway burn going? You can leave them below.