TechFlow news — Solana co-founder Anatoly Yakovenko shared key insights on startup survival via social media. He emphasized that the only reason startups fail is running out of money, and avoiding cash depletion ensures company survival.
Yakovenko warned entrepreneurs to remain highly cautious about long-term contracts, such as extended office or data center leases, which are effectively equivalent to debt.
He advised keeping contractual expenses below 20% of total expenditures, as exceeding this threshold could be fatal.
Yakovenko also pointed out that large teams rapidly burn through capital. He suggested every employee should justify their cost through profit or revenue contribution. If a company has an 18-month runway, it must achieve profitability or secure additional funding within 6 to 12 months.
He reminded founders that if the company isn't profitable within six months, it may need to cut 33% of expenses; by nine months, cuts may need to reach 50%. Given that contract costs are often inflexible, such reductions could lead to layoffs of 50% or even 70% of staff.
