Runway: How much is enough?

In a follow up to my last post, ITS ALL ABOUT THE RUNWAY, I wanted to share a question I received recently from an entrepreneur regarding runway. She is starting a new business and asked me how much runway should she plan for.

The answer is actually very simple: your runway should be long enough to give you enough time to figure out your business model and determine if you can actually pull it off.

Yes, I’m aware that’s a bit vague. Unfortunately, the answer depends on the business. If you’re starting a business selling baseball cards, then maybe a few months is long enough to be able to prove it out. However, if you’re trying to build a business to send people to Mars, then 5-10 years might be the amount of runway you need.

My general rule of thumb is that you should have at least 18 months of runway when starting a business. In most cases that should be ample time to navigate the best path to building your business. If in 18 months you haven’t yet gotten there, then there’s a pretty good chance either the idea/path isn’t correct, or you aren’t able to pull it off.

Incidentally, it took me almost exactly 18 months to realize that Dragon Army, which started as a mobile game studio, needed an agency component in order to succeed. Two years after that pivot and we’re a flourishing mobile experience agency with the goal of re-establishing the game studio soon. But it took us time to figure out that was the best path for our company, and for me as a leader.

– – – – – –

Hi, I’m Jeff. I’ve founded a few companies – including Spunlogic, 48in48, and my current company, Dragon Army. If you enjoyed this post, please consider signing up for my email list. And of course, you can reach me on Twitter and LinkedIn.