Speed? - A competitive advantage or a liability?

"To perfect things, speed is a unifying force," the race-car driver Michael Schumacher has said. "To imperfect things, speed is a destructive force." No company is perfect, nor is any individual.

That made sense to me. But then again, how do we explain the "Need for Speed" in ventures - early or late stage? Try telling a team or a bunch of investors that we are going to grow slow and steady! It sounds great till a few quarters pass - and then the restlessness starts. "Opportunity costs" start getting thrown in every 2nd conversation!

Its always about spotting an opportunity, getting the model right, getting a team together, raising the money and moving very fast - at what cost?

Is it that the nature of capital is forcing the speed? High-risk, High-return VC/early stage capital is allocated for risky models and the investors want to know if it works (or doesnt) pretty quickly. Their time horizons are also 4-5 yrs (max 7-10) and hence the need to create a business of some incremental value (if not N times) in that horizon.

Most businesses that i have seen - VC funded or otherwise - go through tremendous business model changes before they latch on to the one that works.
Does the speed help identify blind alleys faster - and then, atleast you know what not to do - faster than trying each alley for a few years and then finding it is a blind one?

Given the level of unpredictability in the market (competition, regulatory, pricing, consumer, macro-economic, technology etc), the best bet seems to be the team that can navigate the high entropy levels in the market and figure out, in real-time, what makes sense - without having to start from scratch.

To my mind, companies evolve. They are not designed to be where they are today. So, a series of good and bad decisions have made the business what it is today - with its inherent strengths and weaknesses, its "DNA" and its ability (or lack thereof) to change direction quickly.

So, IMHO, speed has to be used judiciously. Move fast if you think you have cracked the code (and in your gut, if you are honest about it, you will know). If not, be patient. Keep playing with the business, try different models, different target markets, different positionings - till you crack it.
Dont worry too much about what the market thinks about your changing avataars. Once you crack the code, they will all come round. Btw, they are not spending all their waking hours thinking about you either. So, enjoy the ride, be patient - and then accelerate when ready!

It's all about balance

How much money do I raise?
How much do I dilute before it gets too much?
How much should I have when there is an exit?
How many "good" people do I get onto the team before it becomes one too many?
Do I grow slow, conserve my resources - or go aggressive, push for growth - and assume that i will get more resources (money, people) as things develop?
How much time do i spend on the business? and how much with family?

Each context (person, team, industry, stage of business) has its own answers to the above questions - and many other such questions.

But repeatedly, to me, the answer is coming back to one word: Balance.
Like most other things in life. Too much of any one thing is not such a great idea.

Too much money makes the team lose perspective.
Too little and things get sub-optimal.
Too many good team members leaves very little elbow room for each person.
Too few and the team gets stretched beyond belief.

How does one find the balance? When i talk to friends, advisors, investors, industry experts, i get a lot of useful pointers.
But no one-size-fits-all answer but here are some thoughts:

- Are you in it for the long-term (the *real* long term...i.e. 15-20 years or more) and are building an institution? or are you in it to create an exit in 5-7 years?
- How is your financial stamina? Can you hold on and delay gratification for some more time?
- How is your support structure taking it? What does your family think of your current situation? Will they be happier with a faster liquidity event - and then (if you must) you can start another venture? :)
- Are you comfortable with the investor playing a significant part in your life for the next 5-10 years? More money you take, the higher the significance!
- Are you comfortable with someone else running the business after some time? It might be sooner than you think. If not, go slow -and enjoy the ride.
- Most importantly (IMHO), are you confident of the business scaling with the increased resources (money/team)? If so, go for it! If not, go slow and enjoy the ride till you are clear about the model.
Remember, there are 10 other smart entrepreneurs working on the same opportunity!

Once you see the model clearly, do not under-invest. Opportunities and gaps in the market do not lost for very long.

When you see a winner, bet big - but dont lose balance!