A famous thought experiment by Austrian physicist Erwin Schrödinger was never really about quantum mechanics. It was about the human capacity to hold two contradictory truths simultaneously, to know and not know, to carry a box without looking inside it.
Sometimes, your runway number is that box. Precise, rehearsed, and somewhere between a measurement and a story you tell yourself. The number is simultaneously true and not true. It shows a picture of the past, projected forward under the assumption that nothing changes.
In this issue, I want to look at what it misses – and what to watch instead.
If someone asks you how much runway you have, you’ll give them a number. The number is cash divided by burn, usually based on a rolling three- or six-month average.
This might be reasonable in a conversation with investors. However, it’s also almost never the information you actually need to run a company.
The rolling average smooths volatility to produce a stable figure (comfortable) but the number reflects a business that existed two months ago, not the one operating today (uncomfortable).
None of this is a flaw in the calculation. By nature, a backward-looking average will always tell you where you were. What you actually want to know is simple, and almost never answered: Where am I going?
If you're not running a company, it can sometimes be adventurous not to know exactly where you're going. It’s different when you’re actually running a business.
What makes runway crises so reliably devastating is that they are so thoroughly predicted by information that was already available, if anyone had chosen to look at it honestly.
The pattern is consistent enough to be almost archetypal: A customer delays renewal by a quarter, which moves revenue recognition, which changes the burn picture. Expansion plans that were "funded by Q3 revenue" aren’t, because Q3 revenue came in 20% under.
Each event arrives with its own explanation. Each explanation is reasonable. No single moment looks like an emergency.
Taken together, a company that reported sixteen months of runway in January is having a very different kind of conversation in September. The number didn't warn anyone. It was too busy reporting history.
The solution that actually works is a more honest calculation. Replace the single figure with three scenarios, run in parallel:
Building the stress case maybe takes an hour. What it returns is something the base case, for all its comforting stability, cannot offer: a clear-eyed account of how much actual distance exists between your current position and the point where your options disappear.
This is the kind of clear thinking that creates genuine options, because it surfaces problems while there is still time to address them.
What we've found, talking to founders over the years, is that the headline number matters less than what sits underneath it.
Two companies can have identical runway and be in completely different situations.
Take a company with a base case of thirteen months. If their stress case – two assumptions wrong, one quarter off-plan – lands at eleven months, that's a business with genuine predictability. The range of outcomes is narrow. It almost doesn't matter which version plays out.
Now, take a company whose base case also shows thirteen months, but whose stress case lands at three. Think of Schrödinger's cat: the headline number suggested one reality, but opening the box revealed another entirely. That gap is the real risk for the company. Everything looks fine until it doesn't, and when it doesn't, there's nothing left to work with.
This is what runway scenario planning actually surfaces. It’s about how much of your future depends on things going roughly to plan.
A wide spread between base and stress case is a measure of exposure. It describes how much of a company's future depends on things going roughly to plan. A wide spread is not a reason for panic. It is a reason to act, while acting is still possible.
One other thing becomes obvious: the right moment to start a financing conversation is almost always earlier than founders expect. The stress case shows how thin the actual margin is, and by the time that becomes apparent from the headline number alone, the options have already narrowed.
Not every assumption carries equal weight, and part of what makes scenario planning genuinely useful is that it forces you to find out which ones actually drive the outcome.
For some companies, the revenue line is stable, but burn is the risk: headcount decisions, quarterly payment cycles, and infrastructure costs that scale with growth.
For others, it’s the opposite: burn is under control and predictable, but revenue timing is the uncertainty that changes everything.
Running (runway) scenarios surface this. The assumption that moves your stress case the most is the one that deserves the most attention. Often, it’s not the assumption that founders spend the most time thinking about. The runway number will continue to look fine. It is designed to look fine. It looks backward with great precision and reports the condition of a business that is already becoming the past.
Open the box. Find out what is actually inside, while there is still something you can do about it.
.gif){kind=icon}
