The famous line “I feel the need, the need for speed” was spo­ken in a very cava­lier and risk-ori­en­ted way in the movie Top Gun. Howe­ver, for start­ups it is often the case that speed actually redu­ces risk and greatly increa­ses the pro­ba­bi­lity of ulti­mate success. 

We recently viewed a video show­ing a car tra­ve­ling at various speeds over a large pot­hole. At the slo­west speed of 30km/h the car was sever­ely jol­ted, dama­ged and nearly flip­ped on its side. At incre­asing speeds, the damage was actually redu­ced and at 120km/h the car sai­led over the pot­hole with barely a noti­ceable shim­mer. We reco­gni­zed an important ana­logy to start­ups and their need to attain a cer­tain speed to suc­cessfully tra­verse all the dan­gers than can befall a young company.

Fore­most, we often observe that start­ups which move quickly gene­rate signi­fi­cantly more oppor­tu­ni­ties than those that are dri­ving in an overly cau­tious man­ner. If a startup only has so much time on the road and it does not know at which high­way exit it will find its next big oppor­tu­nity, it is logi­cal that the more exits the startup rea­ches, the hig­her the likeli­hood of achie­ving suc­cess (or at least the next important mile­stone on the journey).

One clas­sic hin­drance to speed occurs when a startup spends an inor­di­nate amount of time and energy on a sin­gle pro­ject for a large cus­to­mer. These see­mingly flat­te­ring pro­jects can often be pot­ho­les in dis­gu­ise, and if a startup works through the pro­ject too slowly (per­haps by exten­si­vely cus­to­mi­zing its core offe­ring to meet the needs of this one cli­ent) it can veer off its path, miss other valuable oppor­tu­ni­ties, and, con­se­quently, suf­fer exten­sive damage.

A clas­sic ana­lo­gue of this hin­drance is a startup working too long on its initial pro­duct before put­ting it in cus­to­mers´ hands and recei­ving feed­back. The slow work to per­fect the pro­duct prior to (beta)launch is much more dama­ging to the com­pany than recei­ving dis­sa­tis­fied early reviews of an MVP, which are incre­di­bly valuable to a startup and can help guide it into the fast lane.

Ano­ther com­mon way in which start­ups often need to move fas­ter is with their per­son­nel decis­ion-making. Ins­tead of expen­ding too much time try­ing to improve employees who do not fit well, start­ups gene­rally need to sepa­rate from under­per­forming employees more quickly and should expect to test mul­ti­ple peo­ple in order to sus­tain­ably fill roles. Often start­ups try to reduce the risk of being slo­wed down by wrong hires by scree­ning more rest­ric­tively; howe­ver, in a talent-cons­trai­ned envi­ron­ment, this approach also pre­vents start­ups from attai­ning the velo­city nee­ded to power for­ward and effec­tively cruise over problems.

Cen­tral to all the above examp­les (and many more that are not lis­ted) are the bene­fits of the men­ta­lity that comes with dri­ving fas­ter. When dri­ving fas­ter, one must be more alert and there is no time to waste on annoy­ing issues which, if focu­sed upon, dis­tract from the mission. 

As ven­ture inves­tors, we want com­pa­nies to use our invest­ment to move fast, incre­asing their chan­ces of suc­cess. We pre­fer to invest addi­tio­nal funds in the important shifts, turns and pivots that are iden­ti­fied through valuable feed­back along the jour­ney rather than to pay for a final coat of paint on a car that is still in the garage.

Your bm|t Team