Save Your Startup During an Economic Downturn

I remember we had this meeting, um, with a lot of our employees, and we were like, "Look, we got three options: we can die in two months, we can try to get to break even, or we can try to get this thing profitable."

Hello, this is Michael Seibel with Dalton Caldwell, and today we're going to talk about whether your startup is default alive or default dead. So this is a concept that was actually invented by one of the co-founders of YC, Paul Graham.

Dalton, do you just want to start by explaining what this means?

Yeah, I mean, so to start with, you should read his blog post. It is excellent, it is short, it is easy to read. And so you should read it. But let me try to give you my crash course in it. Here’s what he means by default alive and default dead. As founders, we like to ignore the truth a lot of the time, and one of those truths is: is my startup going to go out of business? Right, it's kind of an awkward thing to talk about. You know, you don't want to bring that up in polite company.

And so the point of default dead is it forces you to be honest with yourself. If I don't raise any more money, am I gonna die? Am I out of business, or am I gonna make it? And default alive is different than profitable. Profitable means today I make enough money that I am profitable; my bank account grows every month.

You sell with me. Default alive means I may be burning money today, but my growth rate is high enough on revenue that I will become profitable before my bank account goes to zero. Does that make sense? And so, if not a single other dollar of investor money comes into the business, my growth rate is high enough such that I don't have to lose sleep that I'm gonna have to raise a round before I die.

His point is this is binary: either you are default alive, or you are not default alive, thus default dead. There's no third option here, friends. It forces you to pin yourself down in your own mind, right? Does that sound right to you, Michael? Did I get that right?

You nailed it. And what's interesting is that another YC co-founder, Trevo Blackwell, basically made a calculator that allows you to calculate this. Because, you know, I would argue it's easy to calculate, but it's just nice to have a tool there where you could just input some numbers, and we'll make sure that's linked to as well.

So I think that with this concept of default dead or default alive, what's so weird is how obvious it is. Like, it's weirdly the kind of concept that the entrepreneur who runs a barber shop will understand before a startup founder.

Right? It's like, it's so logical. What do you think are some of the reasons why founders have a hard time understanding this is important math to do? Like, what's distracting them from this truth?

I think the context is, if you've raised some money, say you're a YC company, raise money, demo day, the belief that you'll be able to raise more money, it's hard to not take that for granted. And you're like, "Yeah, yeah, but really, once you started raising money, you get hooked on it. You know, like, you get hooked on the juice."

Okay, and so the idea that maybe you won't be able to raise the next round, or that'll go harder than you want to, say that out loud is almost a showing—like it's like you're not confident enough. Like, I think it's awkward to speak of these things with your co-founders, with whoever. Because it's almost like, "Well of course you can raise the next round. Like, of course, we’re gonna make it."

And so I think it's that, man. I think, again, we've both been founders. I don't think you want to say this stuff out loud too much. It makes it sound like you're worried or scared, and you certainly would not want to admit this to your investors.

Well, I think that here's the tricky bit in my mind: not only is it that this idea of like, "Well, if we question our ability to raise the next round, are we not confident, or are we going to psych some people out in our team and make them not want to work here?" It's that plus raising the next round is harder.

So you kind of get screwed both ways. Like, I think oftentimes founders believe that raising the next round is going to be like the last round, even though they kind of understand that the next round there’s a smaller pool of people who can do it; they're investing more money. So, logically, it should be harder, right?

Like, mathematically, there are fewer Series A's than seed rounds and fewer Series B's and Series C's, right? And so, but I don't think they internalize that. And one of the things you talk about a lot in the YC batch is this idea that startups are a series of mini-games, and the mini-games change and get harder. I think people weirdly think that this fundraising mini-game doesn't change when of course it does.

Look, of course. And sometimes it's easier when you have a great product and great design. Sometimes your next round is far easier. To be clear, yes, we're not saying it's always harder. But, and here's the big but, it's a moving target, and there's this thing called the economy.

Yeah, this is a thing called, like, investors who are people that are not within your control. We don't know interest rates. And so what you'll see is whenever there's like choppy waters, the default dead people that were banking on the next round being easy die—simple as that. Okay?

It's in the companies that are default alive when there's choppy waters, they live. And I think it's funny because I like your phrasing: we can't tell you whether it's going to be harder or easier to raise your next round. We can just tell you it's probably going to be different than the last one.

So you should be planning for a wider range of possibilities than “same as last time.” And I think about this in terms of margin of error. Like, last thing on the screen, yeah, the margin of error when you're default alive is huge. You can go out and try to raise a round and fail and be fine. There's huge margin for error.

And what's funny—I always talk about this—imagine if TechCrunch wrote an article about every failed fundraise. It’d be—that’s, yeah, we're only reading about the successful ones. There’s lots of failed fundraisers, friends. Lots and lots and lots and lots. The majority of fundraising—the majority, the vast majority.

So I think the folks that are just reading TechCrunch think that most fundraisers succeed, so you're getting a really warped view. And so, again, bear with me.

So most of them fail. Well, guess what? If you're default alive, all right, like that's not good news that your fundraise failed, but you can live to fight another day. But if you're running your business tight, where you have like three months of runway, and you're banking that it's gonna work, and you're running this thing super tight, what happens if your fundraise doesn't work is you die.

I think about default live versus default dead as if you actually control—if you're actually in control of your company and not outside parties, i.e., investors, actually hold the key to your company, you're kind of working for your investors; they're actually your boss. When you're default alive, you're in control of everything, right?

Yeah, it's kind of awesome. It's a question of agency over the outcome. You know, well, in Dalton, we talk so much in the batch about leverage when it comes to fundraising. And when I think about being default alive, there's multiple levels of leverage. One is confidence, right?

If you don't need a deal, man, you're gonna pitch better. Like, that's the way life works. Like, when you don't need something, you're way more convincing than when you're begging for something. And then, two, leverage being the investor knows you don't need them.

So not only is your pitch better, right? The investor knows your business is stronger and knows there's going to be more competition to invest in your business and therefore is more likely to want to invest in your business. So you get like double leverage, whereas on the flip side, if you run your business default dead, you take two average hits.

Like when you really think deep down, especially like you said when you're on low runway, you're like, "If I don't thread this needle or this fundraiser, we're dead." A good investor can always tell whether the company's pitching them is going to die, and even if you want to invest, you offer worse terms or you put in sneaky—you know, there's all sorts of sneaky things ratchet investors can do.

Yeah, yeah, not good, by the way. Like, I would argue that that's an investor being a good business person. If they have more leverage, they should get more positive terms. If you have more leverage, you should get more positive terms.

So Michael, why is this the thing that so many investors don't like us as YC partners telling YC founders? Why do they hate when we say this stuff out loud so much? They're allergic to this advice.

You know, I think that in general, investors are allergic when we tell founders that there might be situations where their incentives and the founders' incentives are not aligned perfectly. It's, yeah, it's like a magic trick. We're like telling people how the magic trick is performed; it's like a faux pas. They don't like it.

Why do they? They always tell us to shut up when we tell people this. They always tell—and I think it's also funny because they also always tell us, "Hey, like we're funding your companies. Like you shouldn't be, like, you know, like telling the founders not to have high burn."

Yeah, exactly! Like I pat your back, you pat my back, you know? Put all this together, and it's like, "Yeah, but man, we've got to put those founders first."

And I think that like the other thing that's really tricky and we were talking about this earlier is that unfortunately founders get caught up with this math around default dead versus default alive because the math they use to pitch their company to investors is only a subset of the math they need to run their business.

And I think this point is really tricky. Like when you're going in and pitching for a Series A or a Series B, so often, especially in a good economy, you're talking about top line revenue, you're talking about new accounts that you've opened, you're talking about your month-over-month growth, and oftentimes you’re talking about your headcount, your hiring plans, slash the execs you've brought on, so on and so forth.

That's the math that you're putting front and center. That's the math that investors, especially in good times, over-focus on. Whereas I'd argue when you're running your company, those numbers are important, but there's also your burn rate, your retention, how much your existing customer accounts are expanding, your revenue expansion over time.

Those metrics are the ones that can better help you when you're trying to figure out how to make sure my company stays alive. And I think this is where things are tricky is that in many ways investors are setting the agenda on what metrics are important for a company, and the investors are a little biased.

Like they have a point of view that might be not oriented around keeping the company alive. And, you know, PG talked about this, right? What was PG's line on this stuff?

Yeah, um, he calls this in the blog post 'killer cure,' where he just points out that a founder and investor have completely opposite incentives. Whereas an investor with a portfolio of companies, if you push them all to grow fast, and some of them successfully grow really fast with a high burn and thread the needle, and you know, become Uber or whatever, and some of them completely explode—like fly the plane into the side of the mountain—like fast.

And there're lots more fast out there. It actually makes sense from a portfolio theory to advise people to do this because either way, either it works great or it dies and goes away, and you get to spend your time on something else. But like either way, it's explosive, right? It's explosive, good explosive, bad.

Well, and for a good fund, that time is the limiting factor, right, not money? Yeah, and board seats. You're limited as a VC on how many boards you can sit on, and so you don't want to set—so, so basically if you're a VC and you sit on a board of a company that takes forever to get big with like low burn, that's kind of boring and kind of bad for your career, and look, you look bad to your colleagues.

Like there's all these dynamics that founders are not aware of. That’s not a good move to be on several boards of companies doing just okay versus if you're a founder and you're choosing between, do you want a zero—literally zero—or do you want to keep going and give yourself more time to figure out product-market fit and maybe you can figure out an exit and make life-changing money?

Yep, then that, to a VC doesn't matter at all. Like, man, that sure sounds like misaligned incentives, right, Michael? Like massively. So sometimes the investor in this equation is kind of perceived by founders who haven't raised money yet as like demanding that the company grows or demanding the company burns a lot of money as if they were the boss.

And I think this is a very bad misconception. Like, I don't—I think that's extremely rare for an investor to be demanding you to like burn like crazy. I think that the horrible truth is that founders don’t need much of a push.

Oh, it's like, it's like how Michael, I hear you're demanding people to raise at high valuations. Yes, exactly! Aren't you demanding? Why, I am! I'm, I'm—I'm twisting their arms to dilute less. I'm so powerful!

I think this is the tricky bit is that like deep down inside every founder wants permission to blitz scale and that they’re special and they're going to build the next big one. And so if you talk to, you know, half a dozen people and one of them is like, "Yeah I don't know, maybe you should grow faster. I don't know, maybe burn's not our biggest concern," like that's actually the fly on the wall recording I wish you could have a reply on the wall.

It's like, "Yeah, you know these numbers I think you want to get these up but I don't know if burn's my biggest concern." And then the founder hears that and they're like, "We're going! It's time!" I knew it!

What did Fast do? They raised 100 million and they burned it in 10 months. They got into a 10 million a month burn, that's incredible. I'm actually super impressed! You have to really try!

You’d have to be working pretty hard on it. We certainly need a lot of recruiters. You gotta hire a lot of people. Yeah! 'Cause, like, what else are they spending money on? There’s no inventory.

Like, if it was a hardware company, I'd understand! But there's no inventory. And it’s, I assume they weren't getting offices; it was during COVID, right? So it's like, I have no idea. I just, it takes effort is my point! You don't just wake up one day with a 10 million a month burn and be like, "Oh, you know, we're cutting free stacks. This spending is out of control in these stacks, we need to..."

Friends, this is tricky. So there's another concept in this default alive, default dead article that was linked to—it was another PG essay called the 'fatal pinch.' I think it's so interesting because we see this in office hours so frequently. Like, it is so common that we will talk to a founder who's in the fatal pinch and doesn't realize it.

It's funny because at the end of the batch, you tell everybody a very simple concept: it's basically stay lean until you have something, and then spend money on growing it. Yet founders inevitably get frustrated, get tired, get distracted, and somehow always come to the conclusion that spending more money allows product-market fit to happen faster.

And what's sad is that like probably at least for me, more than 50 percent of the time, I don't get the office hour before the founders decide to ratchet up the spend. Right? It's always when it's too late. They're like, "Yes, I always get the office hour when they're down to low runway and they're like, 'We're dead! We're bleeding out! You know, please help!' And it’s like, if you would have talked to me six months earlier, we could have tied a tourniquet around your gaping leg wound and you'd be alive!"

Hell, we could have saved the leg! What's tricky is that if you find yourself even suspecting you could be in this situation, like you need to do this math as soon as humanly possible, right? Like you're probably too late to do this math in all cases. And no one wants to do it because it’s too late, because it's a buzzkill, man.

No one, like who wants to be that guy? Everyone’s gonna be mad at you. Your investors are gonna be like, "Oh, why are you bringing this stuff up? You need to focus on growth!" Like, I didn’t—people will give you a hard time to bring this stuff up until it’s too late, and then everyone's like, "Why didn't you bring this up earlier?"

To play devil’s advocate though, "Well, we have a bunch of great engineers at Dalton, we could always get acqui-hired, right?"

Yeah, so we have the data here at YC, and I will not tell you that no acquisitions ever happened. But similarly, what I was saying earlier, where if you only read TechCrunch about the successful fundraisers, it gives you a warped perspective on how common they get or successful, and that most Series A fundraisers fail.

Well, guess what? No one gets acquired effectively! There’s an asterisk next to no one! But the companies of the companies that attempt, when they're low on runway, they're—they flew the plane into the side of the mountain.

There's no acquisition coming, man! Like, I'm sorry! Like, maybe you could get lucky; maybe you built a great team. Everyone says that, but again, like to keep picking on the Fast thing, I think a firm paid them zero dollars, I believe, to get all of their engineering talent.

What would the incentive have been for a firm to pay any money for a company that's rapidly dying? There's no market for a company that's out of money, right? Anyone that's smart on the buy side knows that a company that is hemorrhaging cash will soon be bankrupt.

Why would you want to buy that problem? You're almost worth less than nothing because you often have legal liability, and so no one wants to buy problems. And I think that that's so unfortunate because, once again, if you're sitting at 12 or 18 months of runway, there's even flexibility on the acquisition front that doesn't exist when you're sitting at three to six months of runway.

Like, you can do all the moves that you can do to rescue your company require time. So let's talk about that. Let's talk about the moves. What are some of the tough decisions that you might have to make if you find yourself default dead and you want to change that?

Let's go through the list of pain.

Uh, what's number one?

Well, for most folks, it's literally headcount. It's not office snacks. I'm sorry; that's probably not the thing that's, you know, perks are not bankrupting the company. It's that you hire too many folks. People are expensive, and this is 80%.

Like, I've just seen so many people's burn spreadsheets, you know, you have two—that's always the thing. They want to be like, "Well, but we're very cheap," or we're, you know, they want to tell a story, but it’s people. Overhiring is the thing.

And I think it’s sad because no one likes letting people go. No one likes—like, let's go letting good people go, right? It's horrible. The best founders, if they have to do this, will make sure that they get other jobs.

We'll make sure that they're well—and the best thing is to never overhire to begin with. Like, honestly, yes, actual hack is to not overhire. Yes! Once we start having that "we overhire, now what do we do" conversation, let’s not have that conversation. Like, that's like too far. So the actual advice is: don't make it a problem, and then you don't have to worry about how to fix it.

The number two is ad spend, and man, we see this all the time. It's, "Well, we have this top line goal; we need to hit 80k MRR, right, Michael? Wait, we need to hit 80k MRR. We gotta hit it, and so we gotta spend this much money on ads."

In fact, we have to spend more money on ads every month because we're growing to hit our growth goal. Yeah, and unfortunately, the result of that is also that like our payback period for every customer that we're acquiring is either super long or long and growing, so our ad dollars are getting more ineffective as we are scaling them up.

And we have to show growth because if we stop increasing our ad spend, basically if we stop steering the plane into the mountain and putting the gas—you know, we’re like putting throttle in—if we don’t do that, we won’t raise.

And so you'll talk to founders, but they know the problem. They're like, "Yeah, we're in trouble; we need to raise." And we're like, "Well, maybe don’t! Like don’t crash the plane into the mountain!" And they're like, "Yeah, but you don't get it. If we don't put the throttle into the side of the mountain, we won't be able to raise."

And it's like these are the most frightening conversations. It's so bad! And I think what they—and what they don't want to do is take the L.

Like, they don't want to take the growth hit because they—the idea that maybe someone would fund them, or maybe they could sell their company in some long shot scenario prevents them from not steering the company into the map, right?

And I think this isn't talked about enough. Like, many successful companies have had to take Ls along the way.

Oh, yeah! Like, learning how to take a punch is not a bad thing! Losing face? No one cares! No one cares! Oh, you reduced your ad spend? Your growth evaporated, but you're around to live to fight for another day. That’s fine!

And then the last one—and you brought this up in previous conversations—raising prices. It's like, "Wow! Well, the thing that we're selling now—money! This thing we're selling a lot of right now? We lose money every time we sell it. Maybe we could increase prices so that we are break even or we make a dollar every time we sell it?"

Oh no, that means we're going to sell it to fewer people. It's like, yes! So our plan is to sell a dollar for 99 cents, and it’s going well! And we're like, "Well, have you considered not losing money on every transaction?"

Like, absolutely not! Well, how dare you even suggest that? You talk about this a lot.

Like, I think it exercises a different muscle in your customers' brain when they know they're getting a deal, right? It's like—in some weird way, they're willing to use a product that they would never use in any other circumstance if they know they're getting a dollar's worth of value for 75 cents.

Well, and you see this in New York recently with the 10-minute delivery stuff. There were like eight of them, and you could go get free—they all had coupons. So as a consumer, you could like get a lot of free stuff.

And that was all VC subsidized! Every time that company is losing money. And like everything, it's a wealth transfer from investors to consumers.

Yeah, I actually appreciate that, you know? And to be clear, some of these companies may make it—there may be one or two. Yes! But my guess is the ones that make it are very, very, very smart about this stuff.

I mean, yes, as per DoorDash, who I guess we always talk about, but you know they were good at numbers, and they understood default to live, default dead, and they understood burn. Like, very sophisticated.

And so even though they were flying the plane very close to the mountain, yes, but they were also very aware of the mountain. They knew what they were doing. They were test pilots versus, "Hey, I don't know. Like, I read in TechCrunch that if the more I burn, the more I raise. So I guess—"

Look, do you see the difference, folks? Like doing high-risk things when you're sophisticated and you know the risks is going to work out better for you than wishful thinking high-risk takers? That never works!

Not rational! Yes! And so what's interesting here is this idea that, you know, I was thinking about this—taking one of these hits, right? Taking a big hit to your growth rate in order to get to default alive. It sounds a lot like bankruptcy.

It kind of sounds a little bit like personal bankruptcy where it's like you take a hit on your credit score to kind of clear your debts. And the benefit though is you clear your debt! Like, you are now living sustainably as opposed to unsustainably.

Now here's why it's better than bankruptcy. I think in a traditional bankruptcy it takes seven years for your credit to kind of get repaired. The startup world works a lot faster than that.

So at any given time in your startup, you're being judged on the last six to 18 months. And so if you take this hit, you cut your revenue in half, but you get to default alive, and the result of that is you get to spend the next six to 18 months building a better product, getting closer to product-market fit, or getting product-market fit.

You're going to be judged on just that last six to 18 months. You're not going to be judged on when you had a horrible business that was burning more money than it was making structurally. And you're gonna have a huge advantage.

And what's tricky is like this was kind of our story at Justin.tv and Twitch—like almost exactly. Like, yeah, you had the choice; you looked into the precipice. You guys could have jumped in! You could have just let it go!

Like, right! You could have let it go! So, I mean we had raised about seven or eight million dollars, we had grown to about, I don't know, let's say like 30 million monthly, um, people were watching content, we were making about 750,000 dollars a month in revenue, but we had a million dollars a month in expenses.

We were burning 250,000 dollars a month. And I swear to God, like the come-to-Jesus moment was with half a million bucks in the bank. And I always loved this because, like, you know, as YC founders we don't talk about these mistakes and want to give you the impression that we didn’t make them.

Like we made this exactly! We were right there! They taught me this at McKinsey and Harvard Business; like no! Like, you know, that's what's nice about being former founders is, yeah, man, we got all this wrong!

Yes! Like no one's actually planning right towards the mountain—like straight on like deep, deep mountain, not top mountain. And I remember we had this meeting um with a lot of our employees, and we were like, "Look, we got three options: we can die in two months, we can try to get to break even, or we can try to get this thing profitable."

And I remember like I had to call this meeting, and it was one of the most embarrassing things I've ever had to do up front because I'm just like talking about admitting defeat. I'm like, "Here's the thing: we're gonna die, I messed up; you blew it."

Yeah, everybody, I'm bad at my job! Exactly! Like, raising my hand, "I suck at this!" Hey guys, I let us astray! Yes.

And I remember thinking—and I think this is the silver lining—I remember thinking, I have no idea whether everyone's just gonna quit or whether they're gonna rally, and everyone rallied. It shocked me!

But then, like, I thought about it more, and I was like, "What kind of person joins a startup?" Right? It's not the kind of person who's like, "Well, I don't see any risk here. Like, this seems like smooth sailing all the way, right?"

These are very mature veterans—absolutely not, right? And so, you know, we selected for the right people on the pirate ship, right? Like the pirate ship, they knew they were on a pirate ship.

And I remember everyone was like, "We are going to get this thing profitable!" We had to do some bad stuff. We definitely had to let go of some people. Our version of raising prices, we had to put ads on everything!

Like, we put pre-roll video ads on anything that moved. I remember it was—it was—we literally had this easel with a big piece of paper on it, and I was like, "On this side, we're going to write down everything we can do to cut costs; on this side, we're going to write down everything we can do to make more money, and we're not going to leave this shitty little conference room until there's a hundred thousand dollars of revenue somehow a profit here."

And what's crazy is that we had that meeting in August. By October, we were break even. By the end of December, we generated 1.2 million dollars in profit, and we saved the company.

And I remember the feeling of not needing VCs anymore. And that’s because that’s not the last time we pitched VCs, but just it was the last time that I feel—well, it wasn't the last time; there was a nice little window where for a second we didn’t need VCs to like us in order for our business to be alive!

And what’s funny, man, is that was the moment you were actually tested! And you guys, like you and your co-founders, like that was it—in hindsight, you guys had a choice!

And you did! You took the L! You took the hard, hard—but now here you are! And that was like really smart! And we just see so many folks that don’t do it; they have that—it’s like sitting there in front of them, the hard move, and they don't do it for whatever reason.

Well, and what's crazy is the idea for Twitch happened after that! And like, it makes sense in hindsight why! Like, if you're not just freaked out about dying all the time, maybe you can apply your brain to like how to make this thing work!

I think sometimes it's okay to do a startup bankruptcy. Like sometimes it’s okay to take that L, get to sustainable, and figure out—and especially if you've raised—like, yeah! You see people that raise, and again, like let's keep picking on Fast. Like they could have just not spent the money!

No one forced them to! Seven months in, they could have stopped spending the money, and they'd still have a ton of money! Yeah!

And so there's some amount of like playing along, like there’s some amount of like founder choosing making a proactive choice to not course-correct because they believe the fundraising is going to come in. And again, this is the point of PG's blog post, which is don’t do that, right?

And sometimes, you know, this is what happened to my startup, and this is what happens to the delivery ones—is you have contractual lease obligations that kill people! I had deals with the music industry, and there’s nothing, literally nothing I could do about that! And that sucked!

You know, and so to the extent you have a startup that doesn’t have contractual requirements to burn lots of money like WeWork or something, you know, I’d recommend not starting one of those!

But if you're in one, you should be really careful of this stuff. Yes, um, well, by the way, Venture Debt is similar, right? Like, I am like right when you're hurting, you got to start paying more money out—and they can—very, very similar!

Yeah, so what's the big takeaway here? I think the takeaway is one—before you thrive, you have to survive. And sometimes you're within, you know, sometimes you're gonna hit product-market fit in the first 18 months of your company; sometimes you’re not.

And if you're running your company default alive, you're giving yourself enough time to figure out product-market fit. And, man, sometimes you're getting a product-market fit, but it's complicated, and you're not losing sleep about the macro environment.

Think about how many founders right now are sweating bullets watching the stock market and watching interest rates, and I don't blame them, right? Like, I'm not saying that's wrong, but the default alive founders are kind of like, "Eh."

Whereas the ones who know they need to raise soon—they’re work—they ask a lot of questions, and I get where it's coming from, but they seem nervous. I think the second big takeaway here is that investors are not going to twist your arm to burn, but you should also be careful to not react to the slightest suggestion that burning more might be okay.

Like, unfortunately or fortunately, you're in control here. And like if someone whispers to you, "Oh, maybe you should slam that airplane into the mountain," that's not like—that doesn't mean that you're not the pilot holding onto the stick, and you can control where the airplane's going!

Like, they're gonna be fine, and you're gonna be fine! Yeah, this is the thing! This is what's so weird about this business, is like, who has to live with the rest of their lives that that was their startup or that they could have done something different, they weren't able to?

Versus the investors—like, yeah, whatever! Cool! And they go, you know, they don’t think about it at all ever again!

And then, maybe the last takeaway here is that if you are in an operationally intensive business, you know a lot—DoorDash—you better be 10x better than the people around you at knowing your numbers at steering that plane well!

Yeah, the CEO, the founders have to be pushing for this—not the board, not the VPs, not your CFO. Founders have to care about this! And I'd argue this is one of the dirty little secrets behind Amazon.

They've always known that they were in a low-margin business, and they've always run their company that way. And I'm sure they were so tempted to look at a Google or a Facebook and say, “Why don't we do those things?”

And like, they had to be strong enough to say because we're not in ridiculous high-margin businesses like they are! Like, we're going to play our game! Anything I missed, Dalton? Any other final takeaways?

I think you got it! I mean, I think anyone who's stressed about raising the next round, this is just a helpful reminder: you should read the blog post, you do the math, but you don't have to be as stressed out if you're default alive.

It actually completely changes—it’s like a weight is lifted off your shoulders. It’s crazy because you don't—yeah, you're not hoping that some stranger somewhere is going to bail you out.

It's a bad feeling! But when you're in control, you feel much better! So I'd recommend it!

All right, great chatting, Dalton! Thanks!