In the example mentioned above, the marble that more quickly transformed its potential energy into kinetic energy was able to carry its gained momentum through the flat section and won the race. We quickly drew parallels to the business world and the importance of momentum and non-linear approaches to reaching the ultimate goal. To paraphrase Isaac Newton, businesses at rest tend to stay at rest, and businesses in motion tend to stay in motion.
While momentum plays a critical role for all businesses, startup momentum is perhaps the most interesting phenomenon, as a small group of passionate people is tasked with not just keeping a business moving but starting it from a standstill point of zero inertia. Big vision. High potential energy. No kinetic energy.
Quickly generating kinetic energy is essential for most startups not only to grow and prosper but also to avoid completely losing momentum when the business encounters the inevitable bumps in the road. Many strategies and tactics are employed to create this momentum: hiring more key employees than the current business size might warrant; signing up beta customers at low, zero, or negative margins in order to accelerate learning and market acceptance; engaging in bold partnerships or acquisitions to transform a technology offering; raising more capital than a linear trajectory would require, etc. We at bm|t greatly admire entrepreneurs who can transform energy and create business momentum, and we aim to play a significant role in catalyzing the needed momentum.
We believe the key is recognizing when linearly bootstrapping a business is indeed riskier than consciously creating (indeed sometimes forcing) momentum – maybe even more than one can comfortably control. Of course, each business is unique and the art surely lies in knowing when is the right time to generate greater momentum – certainly one wants to be on an exponential curve, not just falling off a cliff. We, at bm|t, believe we can help young businesses properly time and plan their accelerations in order to have the greatest probability of being on the right growth curve.
Like entrepreneurs, investors can also capitalize on the phenomena of momentum and nonlinearity. In 2018, bm|t worked diligently to transform the powerful 2017 events of fayteq’s sale and InflaRx’s Nasdaq IPO into broad-based energy for all investee-partners and Thüringen. The results were outstanding, as our investee-partners raised over 100 Mio. EUR in capital, and we were able to gain a record number of 16 new investee-partners. You can read further about the strong momentum in 2018 here.
Before presenting the quarter’s investment activity and other significant news, we would like to offer a big THANK YOU to our great investee-partners and co-investors. Working with such brilliant, motivated, visionary people is the fuel that propels us forward!
Your bm|t Team