Paul Graham introduced the "default alive / default dead" framework in 2015. It asks a single critical question: at your current growth rate and burn rate, will you reach profitability before running out of money?
Calculating your status
You're default alive if: - Your current revenue growth rate continues, AND - You reach monthly profitability (revenue > expenses) before your cash runs out
You're default dead if you would run out of cash before reaching break-even at your current trajectory.
Why it matters more than runway
Runway alone is misleading because it assumes no revenue growth. A startup with $50k MRR, $80k monthly burn, 15% monthly revenue growth, and 12 months of cash reaches break-even in month 5 — it's default alive despite a negative-looking runway.
The three levers
If you're default dead, you have three options (ideally combined): 1. Reduce burn — cut expenses, extend runway 2. Accelerate revenue — focus entirely on sales and customer success 3. Raise capital — extend runway to give the growth curve time to work
Graham's advice: becoming default alive should be the immediate priority before anything else. Spending time on fundraising while default dead is backwards.
Use our Runway Calculator to model your exact default alive / default dead status with your current numbers.