Generating Momentum Part II: a portfolio approach to building momentum

How to know when to double down on projects, when to experiment with changes, when to put them on autopilot, when to pivot them, and when to kill them.

A few weeks ago, I introduced my first post on the value of generating momentum in building an entrepreneurial career and wrote about the importance of managing perceived momentum.

Momentum is everything. 

Whether you’re fundraising for a startup, growing a startup, working on a side project, ascending at your job, navigating career moves, or building an audience, having strong momentum makes everything come easier. 

When you have strong momentum, others will have FOMO and thus a sense of urgency to help you, knowing that you’re going to be progressing quickly with or without them. Conversely, when you don’t have momentum, asking others for support is akin to asking them to help you kickstart your car rather than jumping into a moving car. It’s a bigger ask, and they will have less of a sense of urgency to help because you’re not going anywhere.

This is why periods of strong momentum are when entrepreneurs are able to collect the most value. With strong momentum, entrepreneurial people can close rounds of funding, recruit high-caliber collaborators and employees, build massive audiences, close flagship customers, and build strong networks.

When you zoom out and look at entrepreneurs’ careers, there are usually windows of time where they had a lot of momentum and were able to generate a large amount of entrepreneurial assets (skills, domain expertise, network/audience), which then continued to compound for decades. 

To maximize the output of a career, entrepreneurs should constantly be seeking out and finding momentum. The challenge is that momentum cannot be forced. Trying to force momentum is like pushing a boulder up a hill. Having genuine momentum is like chasing a boulder down a hill.

Today, we’ll dive into the portfolio approach to building momentum. The portfolio approach acknowledges that you cannot always force momentum for a venture, and sometimes it’s best to let something build momentum at its own pace. Rather than trying to rush momentum by being either all-in on something or not working on it at all, entrepreneurs can keep multiple projects rolling and allow them to gradually build momentum over time. 

Some things take time and patience to accumulate momentum. Killing a project or doubling down on a project are not the only two options. The recent example that comes to mind (which I’ve written about before) is On Deck. On Deck started as a dinner series Erik Torenberg ran on the side in 2015 while he was still working on Product Hunt. For over three years, On Deck was just that – a dinner series. It wasn’t until 2018 when those dinners started expanding to other cities, and it wasn’t until 2019 that On Deck evolved from a side-project dinner series to a true “startup” when David Booth became the CEO. Even then, it was a slowly-growing, bootstrapped-and-profitable startup until COVID hit, when the need for cloud-native community and career development skyrocketed. On Deck found lightning in a bottle, developing career-altering momentum for its founders and early employees. For its first ~3.5 years, On Deck was just a side project for a few folks and was on autopilot, growing slowly. In it’s most recent 2.5 years, it has grown to attract $20M in funding and over 100 full-time employees. Meanwhile, while On Deck was slowly accumulating momentum over its first 3.5 years, Erik spent time on other ventures like building Village Global (a venture fund). Rather than spending those 3.5 years all-in on pushing On Deck to grow faster than it could have, Erik now is the founder of both Village Global and On Deck — both of which have strong momentum.

This raises the question: how should entrepreneurs know when to double down on projects, when to experiment with changes, when to put them on autopilot, when to pivot them, and when to kill them? Entrepreneurs who take a rigorous and thoughtful approach to how the invest their time on different projects are the ones with the strongest chances of finding career-altering momentum.

Momentum is the growth rate of ROI. Strong momentum means that the ROI is growing the more time you put into something, resulting in exponential growth “returns” as you invest more time.

I’m not just referring to financial returns, but career returns in a broader sense. This includes financial returns, but also returns like audience/network growth, skills, and domain expertise.

When managing a portfolio of projects (including your day job), there are five decisions you can make decisions on how to invest your time, which can optimize for your overall momentum.

• Invest more time: do this when a project is currently ROI-positive and an increase in effort will lead to growing ROI.

• Invest time in experimentation: do this when a project is ROI-positive but an increase in effort will only result in predictable-yet-not-growing returns, you have hypotheses about changes that could increase the ROI, and you have the bandwidth to experiment.

• Put on autopilot: do this when a project ROI-positive but an increase in effort will result in predictable-yet-not-growing returns and you either don’t have hypotheses yet about changes which will increase the ROI or you do not have the bandwidth to experiment with hypothesized changes.

• Pivot: do this when a project isn’t ROI positive, but you have hypotheses around changes which may make it ROI-positive and the bandwidth to experiment with a pivot.

• Kill: do this when a venture isn’t ROI positive, and you either do not have hypotheses around changes which might or you do not have the bandwidth to experiment with a pivot.

Here’s a helpful flowchart illustrating that decision tree:

Taking this rigorous approach to allocating time across different projects increases the likelihood that you’ll find yourself with chasing boulders down hills in your career, not just pushing boulders up hills.