Burn Rate
The rate at which a company spends its cash reserves, typically measured monthly. Gross burn rate is total spending; net burn rate accounts for revenue.
Used in the Books
This term appears in 19 chapters:
"...s have been debugging these systems for eons while we've had maybe 200 years of industrial capitalism and we're still figuring it out. Consider your burn rate. Every venture capitalist obsesses over it. "How many months of runway do you have?" they ask, as if they invented the question."
"Use it. In the next chapter, we'll dive deeper into metabolism - how organizations convert resources into value, why burn rate is biological, and why the companies that optimize purely for efficiency often die faster than the slightly wasteful ones."
"Chapter 2: Metabolism & Burn Rate The Biology of Burn Rate A hummingbird is two hours from death at any given moment. Not from predators. Not from disease. From starvation."
"...s? That's where it gets interesting. --- In Chapter 2, we explored metabolism - how organisms convert resources into energy and life. We saw that burn rate isn't just about speed; it's about efficiency, flexibility, and resilience. *Now we see where that metabolic energy goes: into growth."
"... Sensing Check: Do You Measure What Matters? Start by listing every metric your organization tracks. Sales, revenue, churn, NPS, daily active users, burn rate, market share, conversion rate, support tickets. Write them all down. Now ask: Which of these actually predict future performance? Most metrics are..."
And 14 more chapters...
Biological Context
Burn rate parallels metabolic rate—how fast an organism consumes energy reserves. Like organisms with high metabolic rates, companies with high burn rates need frequent 'feeding' (funding) or they die. The relationship between burn rate and resources determines survival time.
Business Application
Burn rate determines how long a company can survive without additional funding or revenue. High burn rates accelerate growth but increase extinction risk. Managing burn rate is survival management.