Velocity

Not Just For Cars

Jason Warner @jasoncwarner

IME, there’s two types of momentum in startups: public perception & internal Public is about adoption, growth, funding, entering the zeitgeist Internal is all about shipping and culture

Alex Cohen @anothercohen

One of the most important things in startups is having momentum and it’s really hard to get back once it’s lost

Shomik Ghosh @shomikghosh21

@jasoncwarner Shipping, HIRING and culture Key indicators of success we as pre product investors look for is product and hiring velocity Being able to hire well and ship well while recruiting even better folks to join is usually a good indicator of a great culture being formed!

Jason Warner @jasoncwarner

@shomikghosh21 Good explicit call out. I typically lump hiring into culture for brevity but I like your fallout more tbh. Hiring is so important deserves its own comma in the list ;)

Shomik Ghosh @shomikghosh21

@jasoncwarner Haha knew you meant that, just sometimes hard to see culture forming IMO seeing product velocity continue while continuing to add great talent at good velocity = strong culture being formed Usually if one is happening without the other, potential warning signs

Jason Warner had a great tweet above about momentum in startups (external/public vs internal/private). External is what we all see: fundraises, press releases, our friends getting hired, etc. Internal are the indicators of success that employees, customers, and management are all monitoring…that will be the focus of this post.

At Boldstart Ventures, we invest in pre-product or early in product startups. How can you evaluate the potential success/progress indicators when there is no revenue and potentially not even many users expected for at least a year or even two!

Velocity is the answer.

Velocity is a great indicator of success as applied to two primary things: product & hiring. Note: In this case we’re talking about hyper growth or “venture scalable” outcomes from $0-100M ARR in say 7-10 years. The catch though is they both need to show velocity in near lockstep. One or the other only is actually a potential warning signal.

When the product and hiring velocity both are high, it’s one of the clearest signals of an engine working. To go at hyper growth speed while maintaining these two vectors means there is a strong culture forming (importantly a strong culture does not mean it’s a good culture….see Uber in the past, but measuring the effect of culture is hard to do and one of the easiest ways is having product and hiring velocity scale together). If you look inwards at your company and evaluate on these metrics, you can uncover a lot about your org both good and bad.

And this doesn’t just work for early stage companies or private companies but also public companies! Peep Twitter’s stock chart and valuation increase recently as the product cadence notably increased recently and hiring to support it! Some other prominent ones are Shopify, Cloudflare, and Stripe.

modest proposal @modestproposal1

Shipping velocity ↗️

TechCrunch @TechCrunch

Twitter tests new e-commerce features for tweets https://t.co/v2ohVkawM3 by @sarahintampa

The flip side of course is if you have a fast product velocity but slow hiring velocity, a scalable engine has probably not been built which hurts future growth. If vice versa, a product problem is likely being papered over with money and hiring which will lead to major issues down the road.

It’s a helpful mental model for founders, employees, investors, and all stakeholders to keep in mind.