What Speed Is Startup Speed?

Investors often tell Startup Founders that the distinction between success and failure often comes down to one critical factor: Speed.

Startups exist in a unique ecosystem where time is both their greatest asset and their most formidable enemy. Every day counts in the race to validate ideas, acquire customers, and achieve profitability before running out of cash. This urgency creates a culture where problems must be solved rapidly and “getting to yes” on a daily basis is non-negotiable.

In contrast, larger companies often have the luxury of time. Their established revenue streams and market positions allow them to move more cautiously, sometimes even benefiting from a “wait and see” approach. For them, “no” or “slow” can be perfectly acceptable answers as the stakes of rapid change are often higher than the potential benefits of quick action.

But many Founders don’t actually understand what Startup Speed actually is. They think they’re moving fast but oftentimes the feedback they get from Investors is “move faster”. And while it’s easy for a Founder to dismiss advice coming from an outsider, a seasoned Investor has seen fast and has seen slow and knows when to tell Founders to kick their companies into another gear.

Measuring Startup Speed

Everyone talks about “Startup Speed”, but is there a way to measure it? While there’s no definitive test that can tell a Founder how fast they’re moving, there are probing questions that can be used to triangulate “Speed”. Here are examples of useful “Speed Tests”:

Speed Test 1: Rate of Growth

Startup Speed companies strive to meet or exceed the annual “triple triple double double” standard when they’re young and then continue growing at a doubling pace when at mid-scale. Only when they’ve hit public markets metrics do they slow down to sub-100% growth rates. The fastest companies find a way to keep growing even at scale.

Speed Test 2: Rate of Learning

Startup Speed companies minimize the time between adding topics to their learning agenda and ticking them off. Startup Speed companies know how to cut corners and hack their way to delivering super-fast “80% answers” as a precursor to judging whether the last 20% is worth chasing down. And ultra-fast Startups routinely deliver learnings in days/weeks rather than months/years.

Speed Test 3: Rate of Shipping Code

Startup Speed companies understand that innovation is brought to life in code and code is very much like trying to study the stars. To look at a star 50 light years away means looking 50 years in the past. To ship code 1 year after having an idea means trying to address problems that are 1 year old from a market perspective. Startup speed companies are shipping code in days and weeks vs. months, quarters or years at more established companies.

Speed Test 4: Rate of Decision Making

Startup Speed companies realize that forward momentum will slow or stall if the organization takes too long to make decisions. Startup Speed companies are comfortable making rapid decisions with incomplete information and then adjusting if necessary. The fastest Startups are exceptional at categorizing decisions as “reversible” and “irreversible” and relying on judgment rather than attempting to perfect “reversible” decisions.

Speed Test 5: Rate of Talent Management

Startup Speed companies rely on top-tier talent to deliver twice the quality at twice the speed of their competitor’s typical employee. Startup Speed companies can onboard new team members and have them contributing meaningfully within their first few weeks. And Startup Speed companies can identify underperformers quickly and offboard them to make room for the talent they need. The fastest Startups hire self-starters and world class problem solvers instead of spending precious time training and redeeming mid-tier talent.

Speed Test 6: Rate of Crisis Resolution

Startup Speed companies are adept at identifying and solving crises at warp speed. Startup Speed companies don’t panic when problems arise. Positive and negative information travels equally quickly throughout the organization and isn’t slowed down for “spin control”. Instead, Startup Speed companies are structured to identify mission critical problems and can quickly pivot to “war mode” with dedicated crisis management teams spun up and wound down as needed.

Speed Test 7: Rate of Adjustment

Startup Speed companies set measurable goals/KPIs and are quick to adjust plans when it’s clear the goals won’t be met. Startup Speed companies know when a missed goal is acceptable as well as when a missed goal puts the company at risk. The fastest Startups have leaders who are exceptional asset allocators who quickly adjust the assignment of people and budget when goals aren’t being met.

Speed Test 8: Rate of Collecting Input

Startup Speed companies create a culture focused on having ALL conversations as close to “now” as possible. Startup Speed companies think fast and act fast, so the work cadence is designed to collect input from co-workers in real-time. This can take many forms and range from spontaneous huddles to real-time electronic communication channels. But many (not all) seasoned Startup Veterans believe that the fastest Startups are fully in-person because it maximizes the speed and quality of collecting input and solving problems.

This list of “Speed Tests” isn’t exhaustive, but the answers to these tests provide insight into whether a Startup is truly embracing the speed necessary for success. And the converse is also true. Startups that fail to achieve a critical level of speed face dire consequences. Without the ability to “get to yes” on a daily basis, startups risk many forms of death:

Death By Starvation

Slow Startups can easily burn through their cash before achieving product-market fit or scaling enough to attract more capital from Investors.

Death By Being Second

Slow Startups can have problems scaling if there are faster-moving competitors that get in front of customers and build awareness for their offering first.

Death By Defection

Slow Startups oftentimes struggle from morale issues and lose top talent to faster moving Startups.

TLDR: For Startups, the message is clear: If you can’t get to “yes” every day you might as well close shop. The Startup journey is a race against time and those that can’t maintain the pace will likely face some form of death before they can crack the code on the business they’re trying to build.