On Infinite Runway

2025.12.21

CXXXI

[Creating Freedom; Infinite Runway; 3 Levers; The Human Cost; A Foundation of Stone; Ticking Time Bomb]

Thesis: Making sure you have Infinite Runway creates a business that only fails if you give up.

[Creating Freedom]

If you are going to start a business, you should know what you’re actually after.

As I’ve been building BirdDog with my cofounder, Jack, we’ve wanted and want a lot of different things:

• The ability to work on interesting problems

• Freedom from management / busy work

• Wealth independent of a single decision maker (employer)

• The euphoria of altering some part of the world

From the gate, though, one of the most important first step has been creating a business that can support ourselves sustainably. We’re not in this to go “big or go home” or for a flashing blaze of glory—we’re in it for the long haul & don’t want to be stopped by anyone else.

We were and are very focused on the concept of Infinite Runway. How can we build a business that only fails if we give up? From our view, this would mean that it couldn’t fail, because neither of us believe himself or the other will give up.

This is a challenging, audacious, and perhaps bit delusional task, but we’ve been very fortunate that building with it in mind ended up getting us something very close to what we wanted.

The strategy that we followed to build a business this way is quite opposed to the most marketed philosophies for building a very big tech company, so it doesn’t quite get as much attention.

I'm not here to argue about which way is right or wrong, nor am I here to suggest that what I’m sharing is the only way to bootstrap, I'm just here to share about the pretty critical concept that worked for us:

Making sure you have Infinite Runway creates a business that only fails if you give up.

[Infinite Runway]

In startups, the word runway describes how much longer your company will be around if nothing changes.

You calculate this by checking:

Money in bank / (monthly costs - monthly revenue) = months of runway

Not that this equation only makes sense if monthly costs are greater than monthly revenue. In other words, runway is really describing if nothing changes, how much time a non profitable business has left until it goes out of business.

On the other hand, If monthly revenue is greater than monthly costs, your business is Profitable, meaning it produces more money each month.

We view this position as Infinite Runway: if nothing changes, and you keep applying the same amount of effort as you are now, your business will continue to be around in perpetuity.

To be sure, this is never truly "Infinite” Runway, as things can & do change: costs can balloon, revenue can plummet, one off expenses can crop up. Likewise, a company with 12 months of runway may actually go bankrupt in 3 months, or survive for another 10 years.

While this runway is a static snapshot, it’s been a critical focus for Jack & I that we maintain profitability and keep this snapshot in the "Infinite Runway" zone at nearly all times.

[3 Levers]

There are three broad variables you can tweak to extend your runway or make it infinite:

• Raising Capital extends your runway

• Raising Revenue can extend your runway or make you profitable

• Cutting Costs can extend your runway or make you profitable

Note that raising capital on it’s own cannot make you profitable. You can certainly use the cash you raise to extend your runway or to help increase revenue or cut costs, but the act of raising capital itself does not make you profitable or give you infinite runway.

For Jack & I, since we knew what we wanted was infinite runway, and we also knew that raising capital would take time and effort and not directly contribute to raising revenue or cutting costs, we decided to focus almost exclusively on the other two levers, raising revenue and cutting cost.

And first, we started with the most important cost: ourselves.

[The Human Cost]

The highest cost in a business that is just starting out is the people. Even if it’s just you or you and a co founder, you have to pay the bills somehow.

This becomes harder if you have liabilities or dependents, but it is still done & doable; in our case, both Jack & I were fortunate to have neither.

Still, a man’s gotta eat, and I think this is where the “answer” is the most varied person to person and situation to situation.

For me, I was able to go and live at home with my parents. I am very grateful I could do this, because it cut my personal expenses to near 0. If this option is available to you, and your number one goal is to be able to support yourself with your own business, I would strongly encourage you to throw your pride out the door and consider taking it.

Jack kept his job, which is a much more common and accessible route for people. If you have a sufficient job, and your goal is to support yourself with a business, I don’t actually really know why you’d quit it until the business can (or can nearly) support you.

Having that level of stability can almost entirely derisk the business and let you focus on building it sustainably. I’m sure there are other ways to account for the human cost, as well:

• A stable spouse who also wants you to take on risk

• A work away situation where you trade ~30-40 hours of labor for room & board

• Saving enough money to not do anything for 3 or more years

Every option still involves a massive amount of hard work and commitment and drive, but it severely lowers the risk of building the business.

This is where the hyperscaler VC crowd will disagree with me and say that you have to raise a bunch of money and quit your job and go all in right away or you can’t build a “real” business. I’d say, to each their own and point to Mailchimp & 37Signals.

[A Foundation of Stone]

Once you control for the cost of you, another thing that will help a lot is picking a business model that will have low fixed costs (other than your time) and healthy margins (meaning every time you sell something, you make money off of the sale).

Remember, this is all about your first goal being creating a business that can support you; if you have low fixed costs and positive margins, you should be able to get to profitability with only a few customers! And then, overtime, as revenue increases further you can start to add the cost of supporting your salary to the business.

Classic examples of these business models are Software and Information (like paid communities, courses, books, ads to your audience). I’ve also seen Consumer Packaged Goods (CPG) work really well, especially if you focus on the marketing and keep the supply chain simple (reselling a product you like).

In any case, a commonality that makes any of these easier is also building up an audience to help you sell it.

For Jack and I, we have been doing Software with a sprinkle of Information (via consulting) that we are able to market heavily on LinkedIn.

If you have a low fixed cost positive margin business model and don’t need to pay yourself immediately, all that is left to do is focus on revenue, rather than raising capital or cutting costs.

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[Ticking Time Bomb]

The reason this path is so interesting to me is because from the start, if you control costs and find a positive margin business model, you’ve given yourself infinite runway and can focus on only increasing revenue until the business can support you. You are playing your own game and have limited the variables you have to actively focus on.

To contrast this, another common route is to raise capital at the start of your venture. Raising capital can "extend" a runway, but never make it truly infinite. And, to boot, it usually comes with the expectation that you & your co founder are immediately full time, which often means infinite runway is harder to get to.

Now, three variables to keep your business alive are in play:

1. Raising more capital - If you decide to go to raise capital again, doing it right requires effort in areas that aren’t exactly the same as what you’d do to acquire customers

2. Lowering Costs - If you start with money, you might not have to pick a low fixed cost positive margin business, which adds complexity here. Also, you’ll likely be forced to go full time immediately, which adds salary as a fixed cost right away

3. Increasing Revenue - You can still focus on increasing revenue, which in my opinion, is often the best variable to look at.

Both Jack & I have been on teams where capital was raised and option one, raising more capital, becomes the focus, at the expense of increasing revenue. This can put you further away from Infinite Runway and delay it, which isn’t great for us, because infinite runway is what we want.

If your business is losing money, there is a higher probability that it can fail for a reason other than you giving up (insolvency is a real thing). To contrast this:

Making sure you have Infinite Runway creates a business that only fails if you give up.

Again, neither way is better or worse, just very different. And if you’re going to start a business, you should know which one you want.

Merry Christmas,