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 ana­log 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