The Dark Side of Startup Speed

No matter how great your startup is, moving too slowly is a sure way to lose.


Moving fast is indeed incredibly important, except for when it’s incredibly bad. Over the years, my maniacal obsession with speed has led to many startup catastrophes: losing customers, losing good people, and losing years building the wrong products.


I’ve learned the unfun way that true mastery of speed is nuanced. It is about knowing when to slow down. And It should be developed in two phases:

  • Phase 1 - Learning to execute at max speed by default

  • Phase 2 - Learning to identify the critical exceptions to this default

This article is about phase 2 – identifying those exceptions where taking your time may prevent a big catastrophe, and calibrating your speed accordingly.


What are these critical exceptions? Here are 10 of them.


Exception 1: Fast to fire, slow to hire


This is a well known mantra that everyone knows and fails to follow.


It stems from the basic idea that a single hire can truly make or break your company. You must patiently and carefully get the right people on the ship, and when you inevitably get it wrong you must act fast.


I recommend two approaches for doing this

My Experience

Hiring the first “good enough” candidate used to be my hiring mindset. Why spend an unknown amount of time waiting for the next good candidate? What if this candidate is actually really good?


This mindset led to false positives, which is always a catastrophe for both sides.


Today, I’m waiting patiently for the “hell yea” candidate.


Exception 2: Test big bets fast, then commit slowly


There are two types of big bets: correct and incorrect ones. The former are invaluable and the latter can kill your startup. These bets could be a new product, a new market, or a new business model.


Given their power and unknown nature, big bets should be tested frequently but committed to sparsely and slowly. Or as Jim Collins beautifully explains:


Fire Bullets, Then Cannonballs is a concept developed in the book Great by Choice. First, you fire bullets (low-cost, low-risk, low-distraction experiments) to figure out what will work—calibrating your line of sight by taking small shots. Then, once you have empirical validation, you fire a cannonball (concentrating resources into a big bet) on the calibrated line of sight. Calibrated cannonballs correlate with outsized results; uncalibrated cannonballs correlate with disaster. The ability to turn small proven ideas (bullets) into huge hits (cannonballs) counts more than the sheer amount of pure innovation.

My Experience

When Covid-19 hit, we did a big pivot with extreme urgency. It was such a rush that instead of testing and researching what we’re doing, we went all in into the unknown because our brains imagined a big potential in it.


That pivot failed, and in the next one we fired many bullets before firing the calibrated cannonball. This time it was a home run. Here’s more about good and bad pivots.


Exception 3: Fast to no and slow to yes


Speed is not the result of working fast or long hours, it is the result of focus. The vast majority of things that your startup can do are exciting, valuable, and not worth doing.


Say no to anything not mission critical. on the spot. Even discussing it is a waste of time and speed.


Losing your focus might not feel like a catastrophe. It is 100% a catastrophe.


My Experience

My co-founder taught me a framework for saying yes:

  • Never say yes on the spot

  • If you do say yes, estimate how long it will take, and block double that time on your calendar

This framework greatly improved my wellbeing, focus, and effectiveness.


Exception 4: Fix fast after diagnosing slowly


Your job is to solve company problems. You are the company mechanic.


The only way of solving a problem is to understand it deeply and accurately. As Einstein said: “If I had an hour to solve a problem I'd spend 55 minutes thinking about the problem and 5 minutes thinking about solutions.”


You must take ample time to diagnose and understand a problem. Otherwise you are going to spend a long time trying to solve the wrong problem which isn’t there.


Once the problem is diagnosed, the main risk in solving it becomes execution. Pick a solution that makes sense and default to immediate action. On the basis of deep diagnosis, solutionizing must be quick and execution ruthless.


My Experience

Doing this well is one of my biggest challenges. It demands a quick switch from one mode (deep thinking) to another (ruthless execution). I found the following to work well

  • Write down the problem analysis and have others approve or reject it

  • Once approved, agree on the first execution step and how to start on it the very next day (no excuses)

More about this process here.


Exception 5: Make decisions fast, but momentous ones slowly


Most decisions can be made quickly because they are either reversible or non-consequential. The benefit of making them more accurate doesn’t justify slowing down your company.


The only exception to this rule are irreversible consequential decisions. These should be made slowly because getting them wrong is by definition too costly.


Here’s how Bezos makes decisions:


My Experience

My experience is that irreversible and consequential decisions are extremely rarer than it seems. When about to spend significant time on a decision, ask yourself if it’s this rare kind or not. If it’s not, follow this to optimize for decision efficiency. If it is then decide slowly, carefully, and methodically.


Exception 6: Take money fast and then spend it slowly


One thing that investors are incentivized to teach us is that “smart” money and “stupid” money are different. They are, but barely so in comparison to not having money. Whenever there’s an opportunity to grab money, grab the bag and run.


The other thing that investors are incentivized to do is have us spend that money fast. This is because their goal is for one of their portfolio companies to become disproportionately massive and disproportionately fast. The other companies don’t matter.


Your goal is that the single company in your portfolio, your startup, succeeds. Optimize for having as much money in the bank at any point in time. That’s it.


An exception worth mentioning is taking in the first venture capital money. This should be done slowly and intentionally because it is an irreversible consequential decision.


My Experience

The first time we took in VC money we planned to take a pretty moderate amount. By sheer luck we ended up taking 3 times more, which saved our company down the line.


The 2nd time was our seed round. We immediately started spending aggressively despite not having product-market fit. That speedy spending nearly killed us as well.


In retrospect I would’ve always raised faster and spent slower.


Exception 7: Promote high achievers fast and everyone else slowly


Allow me to first clarify that everyone should be objectively promoted based solely on competence and performance.


The question is the timing of the promotion:

  • Do you promote someone into a big challenge before they are fully ready for it?

  • Or do you promote only when they are fully ready and already proved themselves?

The answer: it depends.


High achievers want to be promoted prematurely, struggle, prevail, and prove themselves – they have very little patience and get bored quickly. Everyone else is risk averse, will suffer a lot from this approach, and would rather be promoted once fully ready.


It is critical to understand the different risks you have with different types. Timing a promotion wrong often ends in resignation.


My Experience

Let’s just say that I’ve lost good people by getting this wrong in both directions.


My experience on the other side is my time at Facebook. Facebook unilaterally takes the delayed promotion approach. While working there I had a strong desire to become a manager but I hadn’t had any more patience to wait for it. Perhaps with a different approach I would have still been there.


Exception 8: Inquire fast, manage slowly


The main tool a leader has to stay informed, influence and motivate their people, and identify problems, is inquiry. You must be asking questions frequently and promptly to be whole with your organization and subordinates.


This is different from managing people. When managing people you want to see the human in front of you. This means taking as much time as needed to listen, understand their situation, and think deeply before you give suggestions or commands.


Remember that mistakes with people are often the irreversible consequential kind. Manage them slowly and carefully.


My Experience

I had a manager who was doing everything fast and on the spot. He always had an immediate answer and a suggestion for everything I brought up.


Perhaps If he had taken the time to listen and learn about me and my needs, those answers and suggestions would not have been wrong 100% of the time.


Exception 9: Serve fast and push slowly


There are two good ways to lose customers, serving them too slowly and pushing them too hard.


Serving doesn’t only mean answering emails fast, it means being customer focused. Understanding the changing needs of your customers, their blockers and frustrations, and quickly getting those out of the way. This is what customers rightfully expect by default.


But as a business, you always need more from your customers. More engagement, more upsells, more referrals, more case studies. It is extremely important to not only push for these slowly, but really go at the pace of your customer. The customer has zero interest in your needs and timeline, and trying to change that is futile.


My Experience

As a startup serving governments, the stark speed difference between us and our customers could not be any starker. We once pushed a customer to run more projects on our platform, completely for free and for their benefit.


Turns out that when a customer has no projects they have no projects. So instead of running more projects they stopped working with us.


Exception 10: Plan fast, strategize slowly


Planning is integral to execution. We plan the next sprint, the coming quarter, and the next year. We plan all the time, and execution speed correlates pretty well to planning speed.


Strategy is different than planning in 3 ways:

  • Good strategy is as emergent as it is planned

  • Completely fleshed out strategy is not necessary for fast and effective execution

  • You don’t get to the end of a strategy as you do with a plan. Your strategy always evolves and accompanies everything you do


Point being, a good strategy is never set and finalized, it is slowly changing and evolving to no end.


Do not finalize your strategy on day one. Do not ever finalize it.


My Experience

Getting this wrong got us into the dark year of my startup. One day we’ve decided that our strategy is to help governments “share and learn” with each other. That’s it.


We were set on this “strategy” but made no plan. Instead of evolving the strategy slowly together, each team went on its own way with their own idea of what this strategy meant.


It has taken us a whole year to understand that with a rushed strategy and no plan we have achieved nothing.


Conclusion


As a startup, your only true edge is speed. Moving too slowly means having no edge at all.


To move incredibly fast, you must avoid those sharp turns where going too fast will end in a catastrophe.


How? by following these 10 exceptions:

  • Fast to fire, slow to hire

  • Test big best fast, then commit slowly

  • Fast to no but slow to yes

  • Fix fast after diagnosing slowly

  • Make decisions fast, but momentous ones slowly

  • Take money fast and then spend it slowly

  • Promote high achievers fast and everyone else slowly

  • Inquire fast, manage slowly

  • Serve fast and push slowly

  • Plan fast, strategize slowly


Move fast by default. Slow down when necessary.

 

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