Solana co-founder Anatoly Yakovenko recently shared vital survival tips for startups on the X platform.
He emphasized that the primary cause of startup failure is running out of funds, and avoiding this can help ensure the company’s survival. Yakovenko warned entrepreneurs to be very careful with long-term contracts, such as office leases or data center agreements, because they are akin to debt. He advised keeping contract expenses below 20% of total expenses, and said that exceeding this threshold is extremely risky.
Yakovenko also emphasized that large teams can burn through funds quickly. He suggested that each employee should be justified by profit or revenue. If a company has 18 months of cash reserves, it should reach profitability or refinance within 6-12 months. If profitability is not reached within six months, a 33% reduction in expenses may be required; after nine months, a 50% cut may be required. Given that contract expenses cannot be reduced, this can lead to layoffs of 50% to 70%.
