── ── Startups
Ramen Profitability & Default Alive/Dead
Ramen profitability (Paul Graham) = the startup makes just enough to cover the founders' basic living costs. It matters because it flips the company from default dead (will run out of money on the current trajectory) to default alive (reaches profitability before the money runs out) — which changes every decision: you stop being at investors' mercy and buy unlimited…
Run Ramen Profitability & Default Alive/Dead on a real problem
Bring something you're actually deciding — free, in the browser.
How it works
1. Compute the honest number — monthly revenue, gross margin, and total burn (include founder living costs). 2. Answer default alive/dead — at current growth and spend, do you reach profitability before cash + committed funding runs out? Gate: if you can't answer this in a sentence, stop and build the model now. 3. If default dead, act early — the trap is discovering it too late to fix. Two levers: grow revenue faster, or cut burn to reach ramen. 4. Target ramen first — covering founders' basics is a huge psychological and strategic unlock; it's often nearer than a full "profitable business." 5. Protect the path — don't add fixed costs that push profitability past your runway. Gate: any hire/spend that moves the default-alive date past runway needs an explicit funding plan. 6. Re-check monthly — the answer moves with growth and spend.
When to use it
- a founder needs to know if the company survives without more funding
- 'are we default alive or default dead', deciding to cut burn or raise, bootstrapping to survival
When not to use it
the company is already comfortably profitable and the question is scaling, not survival.
Worked example
Ramen Profitability & Default Alive/Dead
Ramen profitability (Paul Graham) = the startup makes just enough to cover the founders' basic living costs. It matters because it flips the company from default dead (will run out of money on the current trajectory) to default alive (reaches profitability before the money runs out) — which changes every decision: you stop being at investors' mercy and buy unlimited…
Install this skill (free, MIT)
npx skills add deciqAI/knowledge-skillsUseful? Star the repo — stars help other builders find it.
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