Operating Rules

🚨 Most startups don’t die from bad ideas.

They die because demand never comes fast enough — and the bank account hits zero.

Most companies fail because they never generate enough customer demand to sustain themselves. But the actual cause of death is always the same: the bank account hits zero.

A spreadsheet isn’t a business.
A model isn’t a forecast.
Cash rules everything around you.

Everything else—product, customers, growth—only matters if you can stay alive long enough to figure them out.

Here are the rules:

💰 Rule 0: Don't Run Out of Cash

Every other rule is just how you buy time to prove demand.

🧭 Rule 1: Tell Yourself the Truth

Optimism gets you started. Discipline keeps you alive.

A model isn’t a pitch deck—it’s a simulation. It forces you to write down what needs to be true for your plan to work.

• Every line in your model is a belief.
• Make them visible.
• Make them testable.

If you’re modeling fantasy revenue or dropping in industry benchmarks you haven’t earned, you’re lying to yourself. Stop.

🔧 Rule 2: Use Finance to Make Decisions

Accounting looks back.
Finance looks forward.

If your system can’t answer:

• “Can I hire next month?”
• “Can we afford to delay this launch?”
• “Are we on track for our next round?”

…then it’s not a decision tool. It’s noise.

Finance is how you steer under uncertainty with limited resources.

🧨 Rule 3: Know Your Cash Cliff

Runway is not a feeling. It’s a date.

Every Monday, ask out loud: “How many weeks of cash left?”

Track it like your life depends on it—because it does.

• Cash in bank
• Net monthly burn
• Cash-out date (with 2–4 week buffer)

If you can’t name the date, you’re not in control.

🧾 Rule 4: Default Alive vs. Default Dead

Paul Graham’s test is still the cleanest:

• Default Alive → on current trajectory, you hit profitability before money runs out.
• Default Dead → without new funding, you die.

Most startups are default dead. That’s not fatal—if you know it.

Ask:

• On this trajectory, do we reach more money coming in than going out?
• If not, how many months do we have to fix it—or raise?

The only wrong answer is not knowing.

🧭 Rule 5: Avoid Spreadsheet Fiction

The spreadsheet is just a story about how you believe your business works. It's just your story told using numbers and cells.

Every cell is a belief about the future:

• Who pays who, when, and why
• What milestones unlock the next phase
• What assumptions break you if they don’t hold

Don't confuse precision with certainty.
Those numbers are confidence intervals on your imagination.

The point isn’t to make the sheet look good.
The point is to expose your story — so you can test it, break it, and make it better.

🔥 Rule 6: Burn Is a Choice

Burn isn’t gravity—it’s a bet.

Every hire, every ad dollar, every tool. Each one is a tradeoff.

Before you commit spend, ask:

• What am I buying with this burn?
• What am I giving up?
• When will I know if it worked?

If you wouldn’t spend your own money on it, don’t spend your company’s.

🌀 Rule 7: Everything Is Moving. That’s Normal

Early-stage is fog. The product shifts. Customers aren’t clear. The funding plan changes weekly.

That’s not failure. That’s the job.

You don’t wait for clarity—you create it.

Ask every week:

• What do we need to learn right now?
• What are we trying to prove before cash runs out?
• What’s the next irreversible decision?

That’s how you move forward without spinning in circles.

⚡️ The Ethos

Most startups die in the fog because they confuse building with operating.

You don't control the market.
You don't control the macro.
You do control whether you run out of cash.

1. Tell yourself the truth.
2. Use finance to decide.
3. Know your cash cliff.
4. Decide if you’re default alive or dead.
5. Make burn intentional.
6. Keep moving

Stay alive long enough to build the right product and find demand.
The only unforgivable mistake: running out of cash.

If you’re tired of pitch theatre and want to build a company that survives, talk to me.