How can you tell if a startup is going to be successful? What beacons signal a company will really take off? What flags hint at a potential crash and burn? Investors are constantly looking for elements to guide their decisions, but founders can look to some of the same elements in order to build better, stronger companies and better, stronger products. One of those precursors is product velocity.
In this episode of "Shorthand for Startups", our partner Omar Hamoui shares his thoughts on product velocity and why it can sometimes precede success:
"I've been lucky enough to be around quite a number of businesses. Some I've started, some I've been on the board of as an investor. I've had a chance to see these stories unfold and I found some commonalities that I think of as precursors to success. Some things and traits about businesses that ultimately help them get to a place where they feel like they really have achieved the goals are looking for and gotten to the scale they wanted to.
One of these precursors is product velocity. What I mean by that is the ability to continuously release new features, capabilities, new software (if you're a software company) at a regular pace and have pretty speedy velocity around it. In some cases, companies have a habit of trying to bundle tons of features into these very large 1.0, 2.0, 3.0 releases where it takes them six months to build and then they're going to have this big unveiling of the next version of the product. And then it just doesn't quite deliver what they're hoping and they've spent so much time building it.
In other cases, there's so much tech debt that they're really unable to do anything meaningful new without tons of heavy lifting. The company keeps trying, but they never go back and correct the issue in the first place. They don't spend that the heavy amount of time it would take to remedy the tech debt so they can start releasing at a weekly or every other week.
There are companies now that are trying to release continuously in terms of integrations. Those sorts of small, continuous product releases--that rapid product velocity--has been one of the precursors of success in many of the stories I've seen. And the reason is none of us get it right. Getting to the right answer, in terms of whatever product you're releasing or whatever you're trying to sell your customers, is an iterative process. And the slower you iterate, the slower you get to the answer. And the slower you get to the answer, the slower your businesses.
I think it is worth thinking about how quickly you release stuff, how quickly you're putting something new out in the market. And whether or not you're happy with that pace, whether or not it keeps up with your competitors, whether it keeps up with your customers' expectations, and whether it keeps up with your own expectations. If your product velocity is not where it needs to be, you're not going to find success. I think it's worth stopping now and correcting that issue and getting to the point where you can release fast. Because if you can't release fast, you're never going to be able to iterate your way to the right answer."
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