I read a little way into the article to see whether he'd explain the lack of axis labels or just how the graph maps to anything real. Nope.
The article is reasonable but the loops just annoyed me too much.
Any non-technical, non-mathmatical person would look at that graph and say "yeah, you go around in circles for a while and then finally get things worked out" and I actually thought this was a pretty good post otherwise.
http://smartfaststartup.com/2011/06/08/real-secret-to-startu...
Which make the loops palatable.
"He was saying a real startup trajectory might look something more like this" (emphasis mine)
When we're graphing trajectories, not functions, loops are certainly allowed (see e.g. phase diagrams[1]). Still, without labeled axis those graphs are pretty much meaningless, so I treat them more like an conceptual illustration.