The Runway Razor

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A mental model for better outputs.

In business, the term runway refers to how long a startup or company can operate before they run out of cash.

Companies with lots of runway are adaptable – they can operate through down markets and overcome hardships easier. Companies with little or no runway are handcuffed – they must do whatever they can to stay afloat.

With nearly $63B in cash, Apple has lots of runway. As a result, they've been able to reinvest in R&D, thrive during shaky markets, diversify their offerings, and improve their products quicker – leading to more profits, cash, and runway.

The term runway is mainly used in business, but it's also a valuable life razor. A razor is a mental model or rule of thumb for making better decisions and driving better outcomes.

Here are a few examples:

• Feynman's Razor: if you can't explain it to a five-year-old, you don't really understand it.

• The Rooms Razor: if you're presented with the choice of entering two rooms, choose the room where you're most likely to be the dumbest.

• The Time Billionaire Razor: when choosing between two paths, choose the path that places the highest appreciation on the value of your time.

Razors serve as quick-hitting mental models for making intelligent decisions.

The Runway Razor is simple; when considering a decision, choose the one that adds runway to your life. This could mean opting for a high-protein option at dinner or indexing and chilling instead of day trading your ROTH IRA.

Another interpretation may be going on a sabbatical or taking time between graduation and starting a new job to travel the world with your friends – life experiences can add runway to your life too.

Whatever it is, the idea is to make decisions that lengthen your runway, allowing you to be adaptable, overcome hardships, and reinvest in high ROI opportunities. Kinda like long-runway startups do.

Keep crushing.

Cheers,

Noah Cracknell