Your runway isn’t the cash in the bank, it’s your willpower to keep going, even in the face of what might seem impossible.
Recently, I’ve come across many conversations in the startup world and SV that the current AI wave might be in a bubble. There’s no way to validate or invalidate this, but there is some data that might back it up:
Huge promise of future utopia, but in an on-the-ground real world impact sense there’s been very little (for the average person, SV engineers love it so that’s all they see)
OpenAI and NVDA 0.00%↑ are trading (both privately and in public markets) in a way that is very disconnected from earnings
Revenue is up, but there’s an extreme amount of churn in all of the high-growth AI companies
The market is correcting, and it seems hot air is being released
There’s also evidence to the contrary - there is a lot of growth. So it’s really hard to tell where it will land. It’s all short term speculation, which founders shouldn’t care about anyway when you’re building on 10+ year time horizons.
The problem, is that when the hot air comes out of the bubble, so does all of the excitement about what you’re building. I’ve seen this happen in crypto, and there are decent odds it happens again in AI (probably more similar to the dot com boom). It might feel like everyone is giving up on you and your startup. Your family and friends might think you’re chasing something that will never materialize. Your investors will move on to the next shiny object.
What most founders don’t realize though, is that hot air gone + cash in the bank = greater chance of success, not lower. It’s a gift that looks like a curse.
“But everyone said this was the most impactful technology humanity has ever created“
I’m here to tell you, yes it is still that (I believe that strongly), but the price, money involved etc doesn’t track how impactful it could be it tracks how impactful it is today. In a hot market, it might speculate on the future, but asset prices for risk assets almost never survive impact with the market. It’s going to likely be 5+ years until the large AI companies being built now reach scale, but somewhere in San Francisco, the next Amazon, Google, and Airbnb are already building.
You as entrepreneurs need to not only think about the cash you have in the bank (financial survival), but when everything else goes away, what inside of you keeps driving you to build, even when everyone else gives up.