This to me is the critical factor. If your employees burnout, you have no momentum. They grind to a halt, stop demonstrating the creativity and commitment that a startup needs to succeed through the “dips” (using Seth Godin’s parlance).
Think of it like you’re a rubber band—if you are stretched to the absolute limit, and another shock comes along, the band breaks. To work at your optimum and to absorb shocks, you have to have some slack in the tension of the rubber band, so it can deal with those moments and rebound.