I don’t use the phrase “hockey stick,” in reference to a startup company’s ability to turn a corner and start performing well, simply because I know there’s more at-play than numbers jumping out at me on a financial forecast. Although I appreciate the shorthand for discussion purposes, I like to pay attention to an indicator that could potentially lead to the actual turning of the corner for a startup – namely the phase between their initial rollout to when they enter the trough of disillusionment.
Although the Gartner Hype Cycle is used in context to emerging technologies, I feel this is equally applicable to emerging companies and could be both an emotional and operational indicator of founders “turning that corner” for their venture.
It’s no secret that the first time for everything is never perfect and it’s still true for those whose past startups were successful and they want to start something else anew. After the initial exuberance for the new venture, there will always be that challenge of accepting real world feedback about their product or service and figuring out what to do about it.
As market attitude deflates, the question is whether the management team is objectively putting changes, capabilities, and operations in place to support a pivot. After taking the most important step of actually starting a venture, this would count as the next important milestone to surmount for the team – generally speaking, the vertex of where I would imagine the hockey stick approximating.
Since there’s way too much information and complex dynamics in the above illustration, I’ll most likely revisit these dynamics again in future posts.