$10K Per Month isn't Just Revenue — It's Life Support

The first $10k of recurring revenue in any startup isn't just "revenue" — it's the difference between living and dying as a startup.

For startups, the best shot we have at living to see a big outcome is not dying along the way. While startups are often focused on "scaling to millions," what they often forget is that long before then it's just about keeping the lights on.

Whenever I'm building a new startup, my first and only focus is, "How do we get to 'life support' revenue so we can survive long enough to figure the rest out?" Having been through this startup phase countless times, I look back and realize that the startups that had the most success were those that were able to weather the (many) downtimes along the way.

Why $10k?

Everyone's actual "life support" number will be different, and $10k of revenue for one business with tons of costs is way different than $10k for another startup with zero costs. Also, $10k of revenue if you're a college student makes you a billionaire, whereas $10k of revenue for a mother with 4 kids to feed may be a huge problem.

Don't worry about the $10k figure. Let's talk instead about the absolute smallest number we need to get to to keep the business running, even if it's not paying us directly. In my experience, that number often landed around $10k, hence the title of this, but the number should be aligned with the smallest possible milestone that can allow the startup to live without us.

You'll notice I'm not saying, "And pays us well," because that's a whole other milestone. This is the milestone where we may even have to work another job for a while, but we have enough cash coming in that the startup can continue to exist, even if it coasts for a minute until we get our footing.

The Business of "Starts and Stops"

The reason the continuity of the business itself is so important is because the cadence of startup life isn't all about "constant growth up and to the right" — it's about starts and stops. One minute, we're all psyched to launch this business, and it's all we can focus on. The next minute, we realize we have bills to pay, and we have to go get a consulting gig while we keep the startup going in the background.

While our own lives, and that of the people we employ, may bounce around all of the time, what we need is the startup itself to survive, even if on life support. That means we can pay our hosting bills for our Web site, our AdWords costs to keep traffic flowing, or the warehouse fees to store the products we're selling.

We need our startups to hit a self-supporting threshold that can keep those things going independent of what happens in our own lives. It's not uncommon for a startup to "coast" for months (I've seen over a year) with no active involvement until the Founders or the team can get revenues or financing going again.

Live Long, and Prosper

Giving our startups an infinite lifespan, even if they don't make us a ton of dough, also gives us the opportunity to figure shit out. Contrary to popular belief, most startups don't figure out what they should be selling or even how to sell it for years.

Imagine how many startups would have never existed if they couldn't have just held on long enough to figure out how to build the first Apple Computer or AirBnB. That lifespan, even measured in months, in the formative years of a startup can have a massive impact on whether it ever lives at all.

While we may look at that first $10k (or whatever our number is) as a tiny milestone, it's, in fact, our most important milestone. It's the one that provides enough runway to let us trip over and over again until we finally learn to walk.

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