Urgency is the name of the game in startups.
One key characteristic of founders is the great urge to get things done — and this urge is a key component of success. However, there’s also a tendency to simply blast through everything on the agenda so that you can move faster, which is not always a good idea. There are lucky moments where startups stumble upon something that is suddenly loved and used, but most startups do not have the luxury to shoot from the hip to try and hit the target: they need to know where to aim.
To find out what you should work on with highest priority, you need to paint a larger picture and define your own position within that.
Momentum is an indicator of success, not speed
At Seedcamp, we see hundreds of startups at our events each year, and we usually invest in a couple each month. All these companies are selected from a much larger range of applicants, and they’re already among the best early-stage teams. We look at various characteristics when we make our decisions, but momentum of any kind is often a very solid indicator of success.
Momentum is usually the result of a founding team understanding exactly what they are trying to achieve, and moving the right levers to make that happen. And it’s important to understand that momentum is not about moving the fastest. It’s about moving in the right direction to achieve your goals.
Finding out what that focus should be on at any time requires a deep understanding of a set of different factors: the market situation, your positioning, and the key product components that come out of it.
Understand the market and rationalize your position
Knowing the larger marketplace and your competitive situation is necessary to know how to position yourself. Founders are often engrossed with the idea for a product from a perspective of possibilities, rather than opportunities. But just because something is possible, that doesn’t mean it’s necessarily a good idea.
If the team knows their market in detail and can define why their product or service is stands out from the competition, then they also know which niche in the market is still open — or attainable. They’ll be able to identify where value is being left on the table, or where unhappy customers are fed up with the current status quo. That’s a clear opportunity.
Next comes the definition of the feature set that make up the minimum viable product. It’s not just an exercise about getting anything out of the door, but rather the result of a deep understanding of the most essential part of the whole experience. Successful minimum viable products are addictive and solve one problem immediately. They also often remain at the core of the company’s offering and define their existence.
Don’t forget your customers
The previous steps can never exist in a vacuum – talking to customers is just as important as theorizing and understanding the underlying concept. Failing to balance both leads to either constant reshuffling of priorities, or a product that nobody wants to use.
Understanding these three components enables the team to focus their time and effort on the few necessary actions to achieve momentum. All else is secondary.
In the end, the biggest constraint in a startup is time — so working on the right things is crucial to be as fast as possible. Momentum in these focus areas can then easily be tracked and improved, leading to a virtuous cycle.
Many startups that fail to rationalize their position and raison d’être make rash decisions that are not grounded in an understanding of the bigger picture. Because of the scarcity of time and other resources, this robs the team of what little buffer they have to get it right, and sets them up for failure. The same goes for momentum: if the limited resources of a startup are spread out to solve too many problems at once, none of them will see any measurable progress.
The urgency fueled by the limited resources in early days is one of the reasons founders tend to move too fast without taking aim. However, startups that have identified the right focal points early on can often point to indicators of momentum and use them to their advantage.
Don’t shoot from the hip – aim and focus, so you gain momentum early. The rest will come.
Philipp Moehring is a principal at Seedcamp, Europe’s leading micro-seed investment fund and mentoring program, where he manages portfolio relations, applications, and the mentor program.