If you’re an early-stage founder, you probably don’t have much money. Here’s how to extend your personal runway so your startup has the best shot at success…

Housing — Think Corona, Not Tribeca

This is most people’s biggest expense, which makes it the most important place to optimize.

Housing prices are mostly driven by location. Stay away from hot neighborhoods. 

Look for immigrant neighborhoods a little further out. If you hear Latin music, you’re on the right track.

These neighborhoods are generally safe and people tend to be quite friendly. Earlier in my career, I lived in some places like this myself. 

Consider getting a studio to yourself to cut down on noise and roommate drama. A studio in an immigrant neighborhood shouldn’t run you too much.

Some cities like SF even have special housing for founders. It’s usually pretty basic…bunk beds and the like. But if you’re a sound sleeper, it could work.

Location — No, You Won’t Die Outside SF or NY

You don’t have to be in a major city!

There are great tech companies built all over. I used to work for a company called Epic in Madison, WI that’s valued at over $100 billion.

You could buy a 5-bedroom house in rural Kentucky for a couple hundred thousand, move your co-founders in, and grind with no distractions. My grandparents were from this town. It’s nothing fancy, but it gave them a good home.

So much networking happens online these days anyway! And you could still travel to fundraise and network from time to time.

Once you IPO, there’ll be plenty of time for Tribeca lofts and Pac Heights mansions.

Health Insurance — The Obamacare Escape Hatch

Have you seen the ridiculous prices for these Obamacare plans lately? 

If you buy one, consider whether you need the most expensive tier. A cheaper Bronze plan might still give you the coverage you need.

Personally, I crashed out of the Obamacare market long ago.

In 2018, I signed up for a Christian health share called Medishare. It costs about half as much as the cheapest Obamacare plan. It has a $25,000 deductible and at least in New Jersey, it satisfies the insurance mandate. 

I’m lucky that I can afford one of these Obamacare plans. But the prices are so ridiculous, I prefer not to.

Whatever you decide, remember you have options and you don’t have to do what everyone else is doing.

Transportation — Bikes, Not Bentleys

If you’re spending most of your time locked in a room coding, you probably won’t be spending much in this category.

You may not need a car at all. If you live in a large, walkable city like SF or New York, you probably don’t.

If you took my advice and bought the house in Kentucky, you’ll probably need a car. Go with something like a 10-year-old Honda. 

They’re still in good shape and can be had at a reasonable price. I had one myself years ago!

Food — Beans, Bacon and Gravy

Embrace the Depression-era song: “Beans, Bacon and Gravy”.

Low-cost, healthy foods like beans and rice are perfect for anyone on a budget. And no matter how much money you have, they’re still pretty darn tasty! 

If you don’t know how to cook, start with the blog that got me into cooking: Budget Bytes.

If you really don’t have the time or inclination to cook, frozen food is great and a lot cheaper than DoorDash. Trader Joe’s has a wonderful selection…try the Alsatian tart! 

If you live in an immigrant neighborhood, there will probably be some great taco stands and cheap restaurants nearby when you’re ready for a treat.

Wrap-Up

Some people will recoil from this advice — that’s fine. You don’t have to do one single thing I said.

But if you’re an early-stage founder and you’re really committed to building a billion dollar company, watching your personal burn is critical. 

If you’re spending $30,000 a year and have $50,000 in savings, you’ve got 20 months to make this business work. If you’re spending $100,000, you’ve only got six months.

Low burn could be the difference between having your own company and being forced to go back and work for someone else.

If you’re living a spendy lifestyle right now, these changes will be uncomfortable. But they’ll be worth it.

Ask yourself, “How bad do I want it?” 

More on tech: 

Your Deck Probably Sucks. Here’s How to Fix It.

Do Investors Take Forever to Get Back to You? Here’s What I’m Doing Differently.

How to Tell If Investors Are Really Interested

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