Thinking strategically and planning a runway for the long term is a luxury often not available to individuals and startups merely trying to survive the day.

This challenge is reminiscent of the dynamics in poker, where a player’s bankroll serves as their runway. The larger the bankroll, the more cushion a player has to withstand the short-term fluctuations of the game. Over time, the odds favor the more skilled players, minimizing the impact of luck. This is because the longer the time frame, the more skill becomes a determining factor, and the less influence luck has.

If you have a bankroll of $400 and each buy in to a cash game is $200, you have 2 buy-ins to succeed. No matter how solid you play overall, if you make a strategic mistake with the first $200 and then get hit by a 2-outer with the second buy-in you’re now broke and out of the game. However, if your bank roll was $1000, you now have 3 more opportunities, if it’s $10,000 you now have 47 more opportunities. A longer runaway, ie more time, also means more time to gain experience and knowledge that makes you stronger.

The thing about a short runway or small bankroll is it also increases the pressure on decisions and outcomes in the short term. You have to think and act differently than you otherwise would if you had more leeway and room for errors, experimentation or risk. The stakes become all or nothing very quickly, which begins to look a lot like desperation. Opponents, competitors, customers and users pick up on desperation like a shark smells blood in the water. 

Now apply all of this to runaways for a business or a startup. The shorter the runaway, the more limited the options are. The impact of every decision is heighten because you are constantly balancing and weighing critical trade-offs. Example, if your limited bankroll can only allot for this hire or that hire, or this action or that action, when ideally you really need both of those hires or take both of those actions, you can’t be wrong in a situation where there may be no right. If hire A flames out, you cannot then fix the mistake by hiring candidate B. If you take action A and it fails to deliver the expected results, you cannot then pivot to option B. You are most likely dead in the water until you can build (raise) a new runaway. 

Now let’s apply what we know to a big picture scenario between 2 potential founders. 

Founder A is working with a few thousand in capital stolen from rent money and invested by friends and family. The stakes are extremely high. Not just the hopes and dreams of you and your friends and family, are at stake, but also precious capital most of these people could not afford to lose. The founder is now walking an emotionally charged tightrope. No mistakes can be made, probably working for free, every effort must be a homerun or failure is certain. Initial efforts build a little momentum but they need more fuel to sustain them into meaningful traction. Its right there for the taking, but with so little time it doesn’t work out. Back to square one.

After some time the resilient founder manages to persevere and raise another very small (short) runway and again its not enough to achieve the needed results. Let’s assume this cycle plays out a half dozen times over 15 years. The founder will most likely be looked at as a repeat failure and probably have a very difficult and painful relationship with their support network of friends and family who invested in them, probably more than once. They will most likely have a very difficult and lonely life ahead of them.

Founder B has access to VC’s and a large network of high wealth individuals who the founder gave up lots of control and influence to in order to build a long runway. The founder stumbles badly out of the gate, wastes resources, hires too many people including under-qualified friends, doesn’t gain any initial traction, but at some point one of those frivolous hires proposes an idea that they have the time and resources to take a shot on. It works out, the company takes off and gets its feet under it. The founder is financially successful with an entire life ahead of them to enjoy a high quality lifestyle with friends and family.

A runway is a critical factor in successful outcomes that the majority of low-income founders, creators, artists and innovators rarely have access to in their infancy. What is the result of that dynamic? The rich get richer and a heavily slanted success rate for upper-class privilege. But what’s even more impactful is how many great ideas, founders, art or innovation never gain a foothold in our society because their spark suffocated before it could take off.

Gratwick’s vision for community driven media funds is an effort to address this problem for those that come after us, but in order for that to happen, we must ourselves become the rare example of a great idea and startup that found a way to take flight regardless of the length of our runway.  I am confident we finally have an achievable blueprint for the runway we need for Gratwick to take flight.