The greatest double-edged sword of startups is momentum. Very little can stop you when you have it. Very little can prevent your death when you lose it.
On the surface, startups fail and succeed for a wide range of reasons, but on a deeper level, momentum is almost always the root cause. The story of Facebook vs Myspace is nothing more than a story of momentum.
While Facebook fanatically built up its growth momentum over years, letting nothing stand in its way, Myspace allowed momentum to slow down, then stop, and then go negative. A decade later, Facebook is one of the most valuable companies in the world, and Myspace is a flimsy memory.
Momentum is a good thing to be a fanatic about.
Momentum is just business progress. How it behaves is where things get interesting:
Momentum is like a snowball. It always starts small. If it has what to feed on it will grow rapidly and indefinitely. The bigger it is the more powerful and unstoppable it becomes. Momentum creates momentum
Aside from business progress, momentum is the driver of motivation, external perception, winning mentality, and team energy. It is no surprise that it is at the root of many startup failures and successes
The feeling of momentum within your team is more subjective than you think. What goals you set, how you celebrate success, and what personalities you have on your team can all influence how negative or positive the sense of momentum is. The same exact momentum can be perceived in dramatically different ways
The real question is how to spark, maintain, and regain momentum.
One small win is just one small win. Same for two and three. But just like a snowball, at some point momentum takes a life of its own. That’s what we want.
When UrbanLeap pivoted, we were suddenly starting again from scratch. Zero momentum with a full team and a shrinking runway is the worst state you can be in, so we needed momentum and fast.
How did we create it?
Define the direction - Is it getting customers? Improving retention? Increasing revenues? Building an MVP? Make momentum tangible and measurable. For us, it was getting design partners to build our MVP with us
Break it down - Whatever the direction is, break it down into small steps so that progress can be made and felt every day. In our example: getting a design partner was broken down into getting a lead, running a sales pitch (and seeing excitement), getting a second meeting, and inked commitment
Put 200% energy into it - Momentum is stored energy. Until you have momentum, put everything into creating it
Celebrate every small win - Many founders (this one included) are terrible at celebrating small wins. It helps to understand that celebration isn't just to make your employees feel good, it is a necessary ingredient in sparking momentum
As momentum begins building up, things get easier and easier. Getting the 2nd design partner is easier than the 1st, and the next is even easier.
Momentum either increases or decreases. Hence the only way to maintain momentum is by increasing it. Aim for more, elevate goals, and amp up the intensity.
Shortly after the pivot, we noticed that our momentum was at risk. We were bringing customers and they were satisfied, but their usage was steadily dropping. A big strategic change saved our precious momentum and armed us with 3 important lessons:
Be alert - Look for early indicators of momentum decrease. Don’t explain away any small or early indications of decreasing momentum, they are likely real and very dangerous. In our case, we could and should have responded earlier
Focus - What saved our momentum was that both our CEO and head of product took charge of the challenge. It became the #1 objective for the entire company. Leave shiny new ideas for later
Be paranoid - It is easy to translate early success into complacency, but you should translate it into paranoia instead. Have at least one paranoid person on your team and listen to them
Unintuitively, maintaining momentum is harder than creating it. We could’ve been more alert, focused much earlier, and been less complacent about our success. Next time we will be.
Losing momentum is like getting divorced – nobody thinks that it will happen to them, yet it happens to most.
Because we are human, regaining momentum is harder than just creating it. This is because it’s hard to accept and recover from a momentum loss. It is a very real crisis.
In one failed pivot, we got some crazy PR and lots of signups really fast. It felt like overnight momentum. The sad reality was that our product didn’t deliver enough value to create retention, we had many signups and no users.
Regaining momentum was a two-step process:
Acceptance and Mourning - Losing momentum is a crisis. We had to face it, shut down the product, and spend time with our team and ourselves to recover
Get over it - we pulled up our sleeves and went back to Creating Momentum. It was yet another pivot, but we knew that regaining momentum will make us stronger than ever
Sam Altman says that:
...one of my top few startup commandments is “never let the company lose momentum.”
If there are startup commandments, it is the first one.