Dalton & Michael: Save your startup during an economic downturn

Yeah. I mean, so to start with, you should read his blog post. It is excellent. It is short. It is easy to read. Read. And so you should read it. But let me try to give you my crash course in it.

Here's here's what he means by default alive, default dead. As founders, we we like to ignore the truth a lot of the time. And one of those truths are, is my startup going to go out of business? Right? You it's kind of an awkward thing to talk about, you know, and you don't wanna bring that up in polite company.

And so the point of default to lie, 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 still 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.

And his point is this is a binary. Either you are default alive or you are not default alive, thus defaulted. 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 and what's interesting is that another YC cofounder, Trevor 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 too 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, like, the entrepreneur who runs a barbershop will understand before a startup founder will. Right? It's like, it's 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 what's what's distracting them from this truth? I think the context.

is that if you've raised some money, say you're a YC company, you raise money at 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. Yeah. But but really, once you started raising money, you get hooked on it. You know? Like, get hooked on the juice. Okay?

And so the idea that maybe you won't be able to raise the next round or that it'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 you I think it's awkward to speak of these things with your co founders or with whoever because it's almost like, well, of course you can raise the next round.

Like, of course like, we're gonna make it. And so I think it's that, man. I think I think again, we've both been founders. I don't think you wanna say this stuff out loud too much. It makes it sound like you're worried or scared. And you certainly would not wanna 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 gonna psych some people out in our team and make them not wanna work here? It's that plus raising the next round's harder. So you kinda get screwed both ways.

Like like, I think oftentimes founders believe that raising the next round is gonna 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 so, logically, it should be harder. Right? Like, mathematically, there are fewer series a's than seed rounds and fewer series b's than series a's. Right?

And so but I don't think they internalize that. And and one of the things you talk about a lot in the y c 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 minigame doesn't change when, of course, it does. Like, 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. Yes. And there's this thing called the economy.

Yeah. And there's this thing called, like, investors who are people that are not within your control. We don't know interest rates. Nope. 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. Came out. And the it's and 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 gonna be harder or easier to raise your next round. We can just tell you it's probably gonna 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 this Yeah. Margin of error when you're default alive is huge. Can go out and try to raise around and fail and be fine. There's huge margin for error. And what's funny, I I always talk about this.

Imagine if TechCrunch wrote an article about every failed fundraise. It'd be That's it. We're only reading about the successful one. There's lots of failed fundraisers, friends. Lots and lots and lots and lots of failed fundraisers. Majority. The vast majority. I think folks that are just reading TechCrunch think that most fundraisers succeed.

So you're getting a really warped view. And so again, like bear with me. So most of them fail. Well, guess what? If your default's alive, alright. 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 it's you're running this thing super tight, what happens if your fundraise doesn't work is you die. I think about defaults alive, default dead is 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 your default's alive, you're in control of everything. Right? It's kind of awesome. It's a question of agency over the outcome. Know?

Well, and 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 there's multiple levels of leverage. One is confidence. Right? If you don't need a deal, man, you're gonna pitch better. Like like, this 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 gonna be more competition to invest in your business and therefore is gonna be more likely to wanna 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 leverage hits. Like, when you really think deep down, especially, like you said, when you're on low runway, you're like, shit. If I don't thread this needle on this fundraise, we're dead. A good investor can always tell whether the company's pitching them is gonna die about to die.

And even if you wanna 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 stuff. And 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 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 there's, like and and I think it's also funny because they also always tell us, like, 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? Like, we're all in this together.

And it's like, yeah. But, man, we gotta 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, default live 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 head count, your hiring plan slash the execs you've brought on, so on and so forth. Like, the that's the math that you're putting front and center. That's the math that investors, especially in good times, overfocus 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 they they have they have a a a point of view that might be not oriented around keeping the company alive. And, you know, PG talked about this. Right? What what was PG's line on on this stuff?

Yeah.

He calls this in a blog post killer cure where he just points out that a founder and investor have completely opposite incentives where as 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's lots more fasts 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 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 wanna 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 wanna 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. That in 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 is 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. That's what I Yes. Exactly. Demanding YC founders do? I'm.

I'm I'm I'm twisting their arms to to dilute less. It's I'm so powerful. I think this is the tricky bit is that, like, deep down inside, every founder wants permission to blitzscale.

And that they're special, and that they're gonna 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 fly on the wall.

It's like, yeah. You know, these numbers, I think you wanna 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 It's.

time. I knew it.

What what did FAST do? They raised a hundred million and they burned it in ten months. They got into a 10,000,000 a month burn. That's incredible.

I'm I'm actually super impressed. You have to really try. You'd have to be working pretty hard on it. We certainly had a lot of recruiters. Like, gotta hire a lot of people.

Yeah. Because, 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. Like and it's it's I assume they weren't getting offices. It was during COVID. Right?

So it's like, jeez. I have no idea. I just it's that takes effort is my point. You don't you don't just wake up one day with a 10,000,000 a month burn and be like, oh, you know, we're we're cutting free snacks. You know, we're we're we're this spending is out of control on these snacks. We need to be able we need to tighten our belts, friends. Tricky. So.

there's another concept in this default alive, default, dead article that was linked to. It was another PGSA 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.

And it's funny because at the end of the batch, you tell everything 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% 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 they're like,.

we're we're dead. We're bleeding out. You know, plea please help. And it's like, if you would talk 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 bringing this stuff up? You need to focus on growth.

Like like, I didn't you know? Like, 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, Dalton. We can always get AccuHired. Right?

Yeah. So we have the data here at YC. And I will not tell you that no acquisitions ever happened. But similar to 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 are successful and the most series a fundraisers fail. Well, guess what? No one gets acquired effectively.

Like, there's an asterisk next to no one. But the the the companies of the companies that attempt, when they're low on runway, they're they're they flew the plane into the side of the 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 Affirm paid them $0, 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 wanna 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 and I think that that's so unfortunate because once again, if you're sitting at twelve or eighteen months of runway, there is 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 all of 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 wanna change that? Let's go through the list of pain. What's number one, Naughton?

Well, for most folks, it's it's 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 bankrupt in the company. It's that you hire too many folks. People are expensive, and this is 80 per like, I I've just seen so many people's, like, burn spreadsheets, you know, you have to that's always the thing. They wanna be like, woah.

But we're very cheap or we're you know, they wanna tell a story, but it it's it's people overhiring is the thing.

And I think it's sad because no one likes letting people go. No one likes, like like, let's go letting good people go. Right? It's it's horrible. The best founders, if they have to do this, will make sure that they get other jobs, will make sure that they that they're well paid. And the best thing is to never overhire to begin with. Like like, honestly, the hack Yes.

The actual hack is to not overhire.

Yes. Because once we start having the 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 and, man, we see this all the time. It's well, we have this top line goal we need to hit. 80 k MRR. Right, Michael? We need we need to we need to hit 80 k 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 hit our growing. 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 if we stop increasing our ad spend basically, we stop steering the plane into the mountain and putting the gas Yeah. Or, like, putting throttle in. Yes. If we don't do that, we won't raise. And so you'll talk to founders where they know the problem. They're like, yeah. Yeah.

We're we're in trouble. We need a raise. And we're like, well, maybe don't crash the plane in the mountain. And they're like, yeah, yeah, but you don't get it. If we don't put the throttle into this side of the mountain, we won't be able to raise. And it's like, these are the most frightening conversations. So bad. And I think what they and what they don't wanna do is take the l.

Like, they don't wanna they don't want to take the growth hit because they they the 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 l's along the way. Oh, yeah. Like, learning how to take a punch is not a bad thing. Losing face. No one cares.

No one care 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 the 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 breakeven or we make a dollar every time we sell it. Oh, no. That means we're gonna sell it to fewer people.

It's like, yes.

So our plan is to sell a dollar for 99¢ and it's going well. And we're like, well, have you considered not losing money on every transaction? They're 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 customer's brain when they know they're getting a deal. Right? It's like like in some weird way they're willing to use a product that's like they would never use in any other circumstance if they know they're getting a dollar worth of value for 75¢.

Well and you see this in New York recently with the ten minute delivery stuff. There was like eight of them. And you could go get free they all had coupons. Yes. 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 you're like,.

every single time. A wealth transfer from investors to consumers. You got I actually appreciate that. You know? Yeah. It's a 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, defaulted. And they understood burn. Like, very sophisticated. And so even though they were playing they were 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 I read in TechCrunch that if the more I burn, the more I raise. So I guess do you see the difference, folks? Like, doing high risk things when you're sophisticated and you know the risks is gonna work out better for you than wishful thinking high risk takers.

That never works. Not ritual. 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 kinda sounds a little bit like personal bankruptcy where it's like you take a hit on your credit score to kinda clear your debts. And the benefit though is you clear your debt.

Like like, you 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 eighteen months.

And so if you take this hit, you cut your revenue in half, but you get to default to live. And the result of that is you get to spend the next six to eighteen months building a better product, getting closer to product market fit, or getting product market fit. You're gonna be judged on just that last six to eighteen months.

You're not gonna 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 was, 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 7 or $8,000,000.

We had grown to about, I don't know, let's say, like, 30,000,000 monthly people were watching content. We were making about $750,000 a month in revenue, but we were we had a million dollars a month in expenses. We were burning $250,000 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 love this because, like, you know, as YC founders, we don't talk about these mistakes and wanna give you the impression that we didn't make them. Like, we made this exact like, we were right there. Right? We were That's what you love about investors is they're like,.

oh, I know everything. 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 shit wrong. Definitely. Yes. Like, no one does this shit.

Plane right towards the mountain, like, straight on, like like, deep, deep mountain, not top mountain.

And we I remember we had this meeting 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 breakeven, 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 upfront.

Because I'm just like, talking about admitting defeat, I'm like, here's the thing, we're gonna die. We messed up. We blew it.

Yeah. Buddy, I'm bad at my job. Exactly. Raising my hand.

I suck at this. Hey, Kazan. Let us astray. Yes. And I remember thinking and I think this is the 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 and it shocked me. But then, like, I thought about it more and I was like, what kind of person joins a fucking 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 gonna 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 we had this we literally had this easel with a big piece of paper on it. And I was like, on this side, we're gonna write down everything we can do to cut costs. On this side, we're gonna write down everything we can do to make more money, and we're not gonna leave this shitty little conference room until there's a hundred thousand dollars of revenue somehow of profit here.

And what's crazy is that we had that meeting in August. By October, we were breakeven. By the December, we had generated $1,200,000 in profit, and we saved the company. And I remember the feeling of not needing VCs anymore. And let's be clear. That's not the last time we pitched VCs, but just 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 like And what's funny, man, is that was the moment.

you were actually tested. And you guys you and your cofounder. Like, that was it. In retrospect, in hindsight, you guys had a choice and you did you took the l. You took the hard 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 the it's like sitting there in front of them, the the hard move, and they don't do it for whatever.

Well, and what's crazy is the idea for Twitch happened after that. And, like, I it makes sense in hindsight why. Like, we were 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 start up bankruptcy. Like, sometimes it's okay to take that l, get to sustainable,.

and figure shit 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 like, there's some amount of, like, founder choosing making a proactive choice to not course correct because they believe the fundraising is gonna 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 this is what happens to the delivery ones, is you have contractual like, lease obligations 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.

Well, by the way, venture debt is similar. We're like, damn. Like, right when you're hurting, you gotta start paying more money out. 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 eighteen 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 gonna product market fit'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 to life founders are kinda like, whereas the ones who know they need a raise soon, there's there were there's they they ask a lot of questions. And I I get where it's coming from, but they seem nervous.

I think the second big takeaway here is that investors are not gonna 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 slam that airplane into the mountain, that's not like that doesn't mean that you're not the pilot holding on to the stick and you can control where the airplane's going. And, like They're gonna be fine.

You They'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 if you are in an operationally intensive business, you know, a la DoorDash, you better be 10 x 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 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 gonna play our game. Anything I missed, Dalton? Any other final takeaways?

I think you got it. I mean, I think anyone who's anyone out there 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 your default's 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 gonna bail you out. It's a bad feeling. But when you're in control, you feel you feel much better. So I'd recommend it. Alright.

Great chatting, Dalton. Thanks.