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Startups and rocketships

Rocket ships are a good analogy for startups. Just as the purpose of rocket ship is to accelerate fast and reach escape velocity, the purpose of a startup company is to achieve product-market fit quickly and reach scale. Startups are meant to be rocket ships.

You pour jet fuel into a rocket ship to take it to the moon.

But when your rocket ship looks more like a child’s cardboard toy than a spacecraft, pouring fuel into it will cause it go to spectacularly go up in flames.

The success of a rocket is very much binary—you either make it to orbit or you don’t. At every stage of launch you are either climbing higher or falling to the earth.

In the same way, startups should always be growing in some dimension, be it users, revenue, or engagement. This standard of success is inherently reflected in how step up valuations during consecutive fundraising rounds are considered successful and down rounds disasters.

Why is this the case? Some of this is effect is driven by the fund structure of VCs: fund lifecycles are typically 10 years long, so your growth trajectory should optimally be reflecting an exit within that timeframe. If you are still mucking around trying to find product-market fit in year two, it’s going to be difficult to raise additional capital.

Nobody wants to fuel a rocket ship that is stalled in midair.

As a startup you are moving against the current, countering the existing status quo and the inertia of how things have always been done. Anybody can start a company but starting a company and building a business are two separate things. This is particularly true for startups, where the end goal is to create value at a scale on a order of magnitude larger than that of simple small or medium sized enterprises.

Startups are not lifestyle businesses and time is not on your side. Startups are a vehicle for capturing a lot of market share quickly, especially in emergent markets.

Know the difference and make sure you truly understand what you are signing up for when you “do a startup”. Figure out what your goals are and whether you actually are starting a startup company—it is its own special class and all entrepreneurs should be aware of that. Caveat emptor.

Written by
Full stack engineer, entrepreneur, technologist, former med student. "The best way to predict the future is to create it."