Sure, startups need to move fast. But in the flurry of activity it’s easy for ‘fast’ to become ‘hurry’. And that’s where problems begin.
“We have to move fast…” said every startup founder ever. And it’s pretty good advice. But like most of the platitudes in the startup world, the caveats don’t fit the 280-character limit.
Lean startup principles tell us that moving fast is really about maintaining a high velocity learning cycle. Figure out the most important thing to do next, get it done quickly and measure the results. Rinse and repeat.
But in the trenches of startup life it’s easy to lose sight of this. The reality can end up being do something… anything… and get it done asap.
With most startup failures being due to the wrong team, the wrong product (and so lack of customers) or running out of capital, it follows that decisions about these things are vitally important. We start to run into problems when these are rushed.
It sounds a bit old school, but one of the many things a founding team needs to do well is risk management. That doesn’t mean avoiding risk. Far from it. But it does mean making considered decisions.
High risk decisions can be difficult to course correct. Get them wrong and you waste resources or face unnecessary loss of equity. Take enough time to do your due diligence. And mitigate the risk wherever possible.
It’s basic stuff, but if it didn’t keep happening it wouldn’t need to be repeated…
So how do you de-risk the big decisions?
- Hiring your earliest team members – if they end up not having the right skills or cultural fit, then you’ll likely need to fire them. It’s painful because it can derail the startup’s progress and/or mean giving up equity even though they’re no longer involved in the business.
Mitigation: Work together for a trial period before hiring them formally. If they’re going to receive equity, use a vesting agreement.
- Building your product – spend 3, 6 or 12 months building your product without knowing whether customers want it, and you could face a huge amount of rework later. Not to mention the wasted time and money.
Mitigation: Know exactly who your intended customers are. Build the minimum thing needed to get validation from them that you’re on to something. Ship frequently.
- Raising capital – while it’s exciting to know that investors are willing to bet on you, this can lead to blindly signing a term sheet without fully understanding it. It’s a case of ‘show me the money’ at any price.
Mitigation: Read the term sheet. Get help to understand it. Negotiate the parts you’re not comfortable with.
These are all big decisions, but what about the small stuff like choosing green or red for your Buy Now button. If a change is easy to reverse, then what’s the problem? You can move fast through those decisions right?
Yes, but be careful you’re not just ‘playing house’. Being busy, but not productive.
Running through a heap of tests and product tweaks can make a startup feel like it’s moving at light speed. But that’s not much good if you’re on a hamster wheel.
Are you doing the most important things you could do? All the endless experiments on small stuff probably aren’t going to move the needle far enough.
Source: Sam Altman (Y Combinator) via Twitter
Moving fast is great for learning, momentum and keeping resources utilised. But hurrying can cause sloppy execution. Founders sometimes justify this by citing competitive factors: “But we have to get to market first.”
Unless it’s a truly game-changing innovation, the race isn’t won at launch but through continuous improvement and relentless focus on the customer… not the competitor. As Peter Thiel says, “break free of the competition” rather than waste your resources merely trying to compete.
- You do need to move fast, but it’s more about learning than competing.
- When making big decisions, pause to understand the risks and find ways to mitigate them.
- Make sure moving fast is worth the effort. Work on what’s important.