Do you have momentum?
No? Guess what? You’re not ready.
Momentum is defined as: “The quantity of motion of a moving body, measured as a product of its mass and velocity.”
Momentum is a measure that comes from the world of physics. If I were to translate this to the startup dimension it might read something like this, “Does your company have substance and is it moving?” Translating back to the physical world, if your company hit me in the gut would it take my breath away or would it make me unconsciously scratch my belly?
Substance can come in many forms:
—traction and early adoption
—partnerships that are valuable to both parties
—a functional product, with actual paying customers
—a team that’s off the charts
—a great technology that works
—a compelling solution to a troublesome problem
Movement can come in many forms as well:
—consistent or rapid growth in multiple meaningful metrics
—trusted people, media, or organizations saying great things about you
consistently hitting difficult to achieve milestones
—graduation from a top-tier accelerator
—a killer go-to-market strategy that you’ve tested and works
—a repeatable formula for success
Obviously, this is not any kind of definitive list. But you’ve got to have a lot of both of these, or you’re just not ready. The tricky part is understanding whether or not the substance and momentum you think you have is really, truly, product-market fit.
The takeaway: In today’s environment you’re not going to raise money to “get some customers” or “figure out a go-to-market strategy” or “find a cofounder” or “build an MVP” or “get some publicity.” You’ve got to prove you can do that on your own. You’ve got to come to the table with a tested theory and a formula for success that investors can buy into. They’ve got to believe that $1 in means $2 out, and that their money is going to create value in a measurable way and ultimately get your business to the next stage.
Give yourself enough time.
When I ask founders what they think kills most startups, they say “they run out of money.”
Well, yeah. But why did they run out of money? Did they not build the right product? Did a partnership fail? Did they spend too much time on the wrong thing?
The correct answer? They ran out of time. Time is what kills every startup. And most of us severely underestimate how much time it will take to figure things out. You’re going to want to triple your estimates. At a minimum!
