👉 Background: Amazon has been praised for its one-click checkout. No need to put in your details - because it’s already stored in their system. And supposedly, this one-click checkout increases purchase conversion by around 5%.

👉 What happened: Fast, was founded to provide the one-click checkout experience to all other e-commerce companies. It was founded by an Aussie in 2019 with a LOT of hype (including Stripe as one of its lead investors).

👉 What else: Despite raising $131m last year, Fast only generated $600k in revenue, and it was burning more than $10m per month - which ultimately led to its demise.

🔔 What's the key learning?

💡 A company’s burn rate is the speed at which it is reducing its cash reserves each month.

Most start-ups are unable to generate a positive net income in its early stages.

It is more focused on

• growing its customer base
• building out its product,

before becoming profitable.

💡 But calculating a company's burn rate helps business leaders work out how long they have until they either need to (a) raise more capital from investors OR (b) become cash flow positive/profitable.

💡 Clearly for Fast, they were relying on raising more and more money from investors. But when those trusty investors, like Stripe, pull out of investing more - it creates a pretty nasty situation.