Default alive myth
Let's say you're running a race.
One person runs as fast as they possibly can. They burn out before the race is over.
One person runs slow and steady. They finish eventually, but they can't win.
And you run the perfect race: You run as quickly as you can sustain for the length of the raise, and collapse at the finish.
Who's running the race correctly?
You are, obviously!
But now let's change the game.
You all run at the same paces as before
But then something changes...
Unexpectedly, there's a car crash and the finish line must be moved!
But to make it fair, they won't tell any of the racers where it's been moved to. You all need to find it yourselves.
Now who will win the race?
I tell this story to illustrate a fallacy I see happening in the startup market around fundraising.
This toggling of advice, between telling folks to swing for the fences one moment,
And then an amnesiac chiding months later, when we say startups should be "default alive".
Which is right?
We talk about this almost as if it's a moral quandary:
"If you don't work 996, are you even trying?"
"Startups have to stop burning through money and actually think about profit!"
But it's important to realize that the problem isn't with startups;
It's with us, thinking there is one mode that always works.
The reality: That finish line is always moving.
Here's what actually determines which mode is the "right" mode:
Your end game
And the market
Your End Game
Do you want to be acquired ? Run this business forever? IPO?
All of these outcomes impact how you should run the race.
If you want to get acquired, you may need to grow quickly enough to become strategically important before someone else does.
If you want to run the company forever, you probably need to prioritize profitability and durability much earlier.
If you want to IPO, you’ll eventually need both: Initially enough growth to create a compelling story,
And next the discipline to prove you’ve built a real business.
But your end game is only half of the equation.
The Market
When capital is cheap and readily available, moving slowly can be its own risk.
Competitors can outspend you, out-hire you, and capture the market before you get there.
But when capital dries up, the calculus changes.
The next round takes longer. The bar gets higher. And the funding you built your entire plan around may no longer exist.
The startup that was running the “perfect” race can suddenly discover that the finish line has moved.
Meanwhile, the company that conserved its energy may have enough runway to look around, adjust course, and keep going.
That doesn’t mean one founder was smart and the other was reckless.
It means they were running different races, based on different assumptions about where the finish line would be.
The mistake is pretending there is one universally correct way to build a startup.
“Growth at all costs” isn’t always right.
“Default alive” isn’t always right.
The right strategy means getting as clear as you can on 1. The market you're operating in and 2. Your end goals
And then acting accordingly.
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