Momentum is the lifeblood of the startup. It’s both an input and an output.
You can think of momentum as crude oil and your startup as the oil-drilling operation.
Oil drillers power their drills (called pump jacks) using combustion engines- which basically means they use oil to produce more oil. In this sense, an oil drilling operation is positive sum. We can use a source of energy (1 barrel of crude) to generate more of the same energy than was used (10 barrels of crude).
A startup is like this in many ways. Objectively, you may not be producing much “oil". You may only have a handful of customers and you may not be generating revenue, which means you’re probably far from breakeven.
But, in a sense, the momentum itself is enough to sustain the team. The feeling that things are happening- that the outputs are producing more than the inputs- is what creates a sense of optimism.
It’s the feeling of “winning”.
It’s also important to note how quickly this can fade. One bad month of sales and the vivacious cycle stops. You risk growing only linearly - or worse, not growing at all.
This is what I meant when I said momentum is both an input and an output. Momentum itself is enough to beget more momentum. This energy gets converted into optimism, which increases the pace and urgency of work. When momentum stops, morale decreases, and the future of the company is at risk.
Interestingly enough, the feeling of momentum can be removed from the company’s raw progress.
This is not a view most people agree with. But I believe in many cases it’s more important to generate a feeling “winning” than to objectively look at your company’ performance in the very early stages. The reality of the revenue and growth metrics might be too bleak in some months.
Assuming that management is keenly aware of the reality and not deluding themselves, generating a feeling of false momentum for the team is sometimes okay. Hope is the space between reality and optimism. And optimism is a required input in for future success.