Why Runway

I. 

Jessica, the head of growth at a Series B startup, stares at the whiteboard she and her team have been brainstorming on for the better part of an afternoon. 

“Well?” she asks, “do we think this is worth testing?” 

They decide yes. Jessica thinks this is a good idea because she knows it will drive more leads to the sales team. If they close those leads, it’ll probably be good for the business—although that’s not really Jessica’s domain. Her job is to get leads, and this is going to do that. Case closed.

II.

Across the office, Jake (the company’s CFO) is in a meeting with the two co-founders. They asked him to explain to them how they could improve margin on a specific product by at least 10% by the end of the year. Jake, who spent the last 12 hours duplicating and editing messy Excel spreadsheets to test various decisions’ impact on the margin, is doing his best to explain the options to the founders.

“Can we see the model?” one of them asks. “I want to see how the numbers play out.” Jake opens the Excel sheets, but he knows it likely isn’t going to help. It is going to be a long day.

III.

Working remotely from a coffee shop, Sofia stares out the window, pondering. She’s been writing email marketing campaigns for the company for two years, but she’s never seen a raise and she doesn’t even know what the emails do. As far as she knows, they go straight into the void.

An email lands in her inbox from an address she doesn’t recognize. It’s the company she half-heartedly applied for a month ago. They promise better pay and “a real mission”, but isn’t it just going to be the same thing with a different label on it?

. . . 

As it stands today, people outside of finance departments don’t fully grasp how their work affects the business, people inside the finance department have to deal with tools that become harder to wrangle as the company grows, and most employees just don’t know much about what’s going on with their company’s finances.

In other words: finance tells the story of a business, and yet almost nobody understands it.

There’s a reason all of this is true. And there is, we believe, a way to fix it.

I: Finance as communication 

It may have been sometime during the hot, dry summers in Sumer, thousands of years ago, that people invented writing. (The likely truth is that writing, like so many other things, was developed by many people in many places in many different ways.)¹

More important than where it was developed, though, is what it enabled. You could say a lot here, but you must say that writing enabled two very important things:

• It let people coordinate outside of speaking distance.
• It let people offload information.

Before writing, everything you knew had to stay in your head. Just imagine trying to run a 50-person startup without the capability to offload information—the company would fall apart in a matter of days, if not hours. The ability to coordinate outside of speaking distance was important, too, because it let people offload information on a bigger scale.

And that word—offloading—is really what writing enabled us to do. What used to live in someone’s head could now be written down and shared with as many people as you could get that writing to.

Naturally, images and hieroglyphs on stone tablets were not the end of human communication inventions. We went on to do other great things, like inventing paper and then the printing press, both of which let us collaborate on even greater scales; the printing press in particular enabled the distribution of offloaded information at a greater scale than any invention before it. 

Many years later, on a ship to Europe, Samuel F.B. Morse was having an intense discussion about the recently-invented electromagnet when it occurred to him that it may be possible to communicate via electrical wires. In 1844, Morse asked, “What hath God wrought?” in the first near-instant, long-distance communication that humankind had ever produced. This new piece of magic let us take the things writing had enabled and distribute them across the globe.

Then, the computer. And the internet.

You know this part of the story. These two things built on top of thousands of years of human progress, learning, communication, collaboration, and gave us a springboard for building the future of the human race. Computers were especially good at this because they let people build software, which created abstractions and leverage for collaboration at unprecedented complexity. Software was, and is, magic. It creates new kinds of power for humankind.

And among the early software that was created in this era, there were a few specific tools that would define how businesses run and make decisions (and ultimately, define human progress). 

They were finance tools.

II: A brief history of Microsoft Excel (and other tools)

The origin of the spreadsheet was on a blackboard at Harvard.

It started in early 1978, when a 27-year old Dan Bricklin was paying close attention as a professor wrote out a financial model. And for a moment as important as the origin of the digital spreadsheet, it was all fairly normal: the professor took chalk and drew a grid like what you’d see on accounting paper, then began building the model within that grid. There was just one problem.

Drawing the model out manually was already time-consuming, but it became so much worse if the professor made a mistake or wanted to change something about the model; this meant manually erasing and fixing every affected cell.

So Dan, like so many people who create great things, thought: “There must be a better way.”

And there was. Dan partnered with his good friend Bob Frankonston, and within three years the two of them developed the first-ever spreadsheet software, called VisiCalc. It looked like this:

What happened next is the kind of thing you’d see in a movie montage: Dan sold the business to a company called Lotus, where a man named Doug Klunder (and other talented individuals) developed a more advanced spreadsheet software. Microsoft saw an opportunity, hired Doug Klunder, and by 1985 we had the single most important piece of software ever invented:

Microsoft Excel.

Like writing and the internet, Microsoft Excel was another advancement in offloading complex ideas. Take a financial model in Excel at just about any company: it is capable of running and understanding simulations far more complex than anyone could hold in their head at once.

In the decades before Excel and the computer, what a CFO could not hold in their head they had to write down on physical paper—a process akin to trying to sear a steak with a magnifying glass. Post-Excel, CFOs had an unbelievably powerful sidekick they could use to do calculations that formerly would’ve taken hours or weeks to do manually. 

This, like all information offloading, helped people at companies make better decisions. It helped enable human progress far more than most people give it credit for. 

Post-Excel advancements in communication tools

Oddly enough, much of the modern software that has made substantial progress in collaboration and information offloading has not been finance software—that particular industry isn’t exactly known for its rapid pace of innovation. Excel was more of an outlier than a rule: an innovation closer to the invention of writing, of the telegraph, of software, than the financial software that came after it.

Recently, the biggest advancements in the history of information technology have come from outside of finance. 

Airtable abstracted rows into structured records, creating a new way for people to interact with databases. Figma, in addition to creating the Component, normalized real-time collaboration with designers and everyone else. Outside of databases and design tools, Stripe’s API famously abstracted the complex web of payments infrastructure into the Charge, making payments more accessible for everyone. We’ve seen so much powerful innovation and abstraction in software. 

And yet, most companies today still run their finance on software that’s incompatible with the company they want to run—and the world they want to live in. 

Why existing finance tools no longer cut it

Say you’re interested in finance. You’re good at it, even. Your friend starts a company, raises a pre-seed round, and asks you to take over its financial operations. You say yes.

Now what?

In the beginning there is nothing. So you create a spreadsheet. The company is small and there aren’t that many things to track, so perhaps your company’s entire operation can be tracked from a single spreadsheet. Clean, simple. You thank Dan Bricklin and Doug Klunder and all the other geniuses that made software like Excel and its successors possible.

But the company starts growing. You raise a few million dollars. You hire a dozen more people. The number of things to track and model grows exponentially. You’re getting more data from more places, data which is harder to keep up to date, data is now more confusing than it used to be. But you can handle it—companies have been doing this for decades. So you buckle up and build more spreadsheets with more complex models in them. This works, mostly.

Then growth really takes off. You hit Series A, Series B, the company headcount passes 100, you’ve got more departments than you can count on one hand. Things are really moving along. Now, each department has their own spreadsheet. And you, as the now-CFO, have to create these spreadsheet templates, email them to the people responsible, and ask them to fill them out (even if these department leads don’t fully understand the purpose of the spreadsheet). 

As this happens, the complexity: of the business increases: more product lines, more customer segments, more marketing channels, new geographies. As you scale, the business becomes more dimensional, and Excel is not designed for this highly-dimensional use case.

You ultimately arrive at this unfortunate tension:

• As your business grows, you have to make more and harder decisions.
• As your business grows, existing financial tools become less and less useful.

A couple of things are true as a result.

One is that it’s really hard to make good decisions about finance, and that this becomes increasingly true as a company grows. Nobody aside from the finance department knows what’s really going on. Even the CFO might have a hard time understanding the most important parts of the business at a glance, or easily modeling how specific decisions might impact the business.

But maybe worst of all, people have come to believe that finance is a spreadsheet (or a series of them). That finance is spreadsheets and archaic tools. That finance is rigid, rote, siloed, and boring, and that it’s not something anybody besides the spreadsheet wizards in the finance department should be concerned with. This has become the mainstream belief in the world—and it could not be any more damaging.

At Runway, we want to change the way everyone thinks about finance.

III: Making businesses understandable and accessible

At Runway we’re building a new, more powerful finance tool.

Everyone says they want a better world: one where people care about their work. Where finance is no longer a black box. Where anyone, from the growth lead to the CFO, can make smart decisions about what to work on—and feel good about those decisions.

And yet, existing financial software doesn’t seem to be getting us there. Instead, we’re stuck in a phase of incrementalism: small improvements on the same old foundation. So we started from first principles and asked the question:

What would a better kind of finance tool look like?

The answer to that question is what we are building at Runway. Instead of incremental improvements, we’re building from the ground up: new abstractions, new ways to think about data, and more capability than our current customers tell us they thought was possible.

With Runway:

Planning is more understandable and accessible

‍A new abstraction in Runway, Plans explain why numbers change, helping you capture important business context that spreadsheets alone cannot. With Plans, you can easily play with assumptions, headcount, and timing in a simple drag and drop interface rather than fussing with D17 and Sheet8!Q4823. 

Modeling is more understandable and accessible

‍In old finance tools, calculating runway might be A1/B2 (where each of those cells has its own laundry list of calculations, adding up the values in hundreds or thousands of other cells). In Runway, it’s just Cash / Burn. Our approach to modeling lets you build new kinds of models, faster—and you often don’t even need to know how to build them, you just need to ask the question.

Collaboration is more understandable and accessible

‍In the past, collaborating on finance was a monumental headache—asking people to fill out sheets, creating copies of documents, editing permissions, adding context to the thing you’re sharing. It was a mess. In Runway, collaboration between everyone on the team happens in the same place—everyone understands what’s going on, and you can set permissions by individual team member. 

(It would be hard to detail all of Runway’s functionality in a single essay, let alone a single section of an essay. If you want to learn more about our product, head here.)

IV: Why this matters

You started this essay by reading about the world we’re living in today. But we don’t think that version of the world needs to exist for much longer.

Jessica, who leads growth, shouldn’t have to throw darts in the dark when she’s planning campaigns—she should know exactly how her decisions affect the business. Evan, the CFO, shouldn’t have to spend dozens of hours wrangling spreadsheets and getting models to work, then spend another dozen hours wrangling that data into a Powerpoint. He should be able to get the data he wants, when he wants it—and he should be able to present to the CEO in Runway. Sofia, who just joined the company, shouldn't have to worry if her job is worthless, or that she isn’t contributing in a meaningful way. She should have visibility into why her work matters.

With Runway, this change is already happening.

When I talk to the CFOs that use our product, they tell me Runway saves them hundreds of hours a year—hours they can use for higher-leverage work. They also tell me that Runway lets them create models and ask questions that other finance software simply doesn’t allow for. And, finally, their job no longer feels like some incomprehensible genre of work that everyone else is destined to never understand.

When I talk to founders and CEOs, they tell me that Runway lets them see what’s happening in their business both at a glance and in-depth. They’re not staring at a stuffy Powerpoint anymore, or trying to make sense of archaic software. They just open Runway.

When I talk to people on our team, they tell me how excited they are to get back to work on Monday. They tell me this is because they have purpose. Runway gives them a clearer window into why their work is important, and what it means for the company (and our mission).

Sure, Runway helps you run a more profitable company that makes better decisions across the board. But we want to do more than that. By building the engine that simulates your entire business, and then making that engine understandable and accessible to everyone, we are building a world with a new way for people understand how business ideas run. A new way for people to find purpose in their work, and by that extent, their lives.