Founders, like investors, know that success comes from delivering outcomes that compound over time. It’s the same as finding a durable asset and holding on for dear life (HODL). But when it comes to building startups, understanding compounding value is not the same as having the conviction to apply it.
Take, for example, two real companies – darlings in fact. The first was Fast, a checkout startup whose very name reflected its approach. Fast raised $125 million and then quickly burned through $10 million each month. The company generated $600,000 in revenue in 2021, and died six days after funding talks collapsed in April of 2022. In other words, a business that personified speed was also killed by it.
The second is Superhuman (present tense). In 2019, this startup rapidly grew a waitlist of 180,000 people and then made the strategic decision to onboard just 100 new users per week, thereby temporarily slowing growth to create a durable engine fueled by a net promoter score/product market fit (NPS/PMF) rocket. By 2023, Superhuman had reached $100M+ in annual recurring revenue (ARR) and SaaS-leading retention.
The takeaway? The company that moved deliberately, with an eye on constructing a future-proof asset is not only alive and well, but the raving fanbase they built by slowing down to ensure they won the heart of every user they onboarded, continues to compound month-over-month, year-over-year.
The Relationship Between Speed and Success
When you strip away the luck that can come with market-timing, speed and durable success are inversely correlated. The startups that compound into real outcomes are disproportionately the ones that refuse to sacrifice durability for velocity.
But if this is true, why do so many founders simply index on speed? The appeal of ‘fast’ is often drive by factors well beyond the business. There are personal, financial, and psychological pressures pushing founders and investors toward acceleration, even when the underlying numbers suggest patience.
This doesn’t mean that acceleration is bad. Speak to any investor in the current market and ‘growth rate’ will be one of the first, if not THE first, words out of their mouths. But if you read between the lines there, growth rate is not about speed… at least not just speed. It’s indicative of the speed with which a business is able to achieve demonstrable and sustainable growth. That means you need to be intentional about when you step up to the launchpad. If you plan on camping out at the launch site, keeping warm via a roaring campfire of money – you’re dead – you were expected to have reached the moon already. The point being, speed is great – once you’re confident that you can in-fact launch, and once you do, the fundamentals won’t fall apart from the impending thrust
The Math Nobody Disputes and Everybody Dismisses
This is a gap in discipline. Ask any founder or investor what compound interest is, and they have the answer ready. They can quickly recite that yields garnered through consistency and time always trump big sudden spikes.
When you translate this into the SaaS/AI-native version of the same math, the value of compounding is quickly clear. Strong, consistent net revenue retention (NRR) compounded over five years dwarfs any manufactured acquisition push.
Similarly, the ‘Rule of 40’, which puts growth and profitability into a single constraint: a healthy SaaS company’s growth rate and profit margin should add up to at least 40% (these days the baseline is closer to 60%). Growth can’t be evaluated independently of what it costs to produce.
Customer acquisition cost (CAC) payback and burn multiple are chapters of the same story. Capital efficiency is compounding in disguise; excessive burn works in the opposite direction. A dollar that has to be replaced by investors, debt, or by scaling back other areas of the business, isn’t getting the chance to compound in value.
Why Founders and Investors Still Default to Speed
So if the value of compounding is well-known, why do so few founders make the choices necessary to yield it? One major reason is that speed manufactures a feeling of control and progress even when it’s destroying long-term value. Momentum, even manufactured momentum, feels good… to the uninitiated. Don’t allow activity to become a proxy for progress.
There’s also the very real matter of a founder’s personal risk clock. They’re looking at their startup, feeling more and more panic as their perceived runway gets smaller while competitive pressure gets larger. Morale wanes as they picture the fleeting prospects of any future fundraise. This clock tends to strike midnight much quicker than company’s strike gold in terms of growth.
Investing hype-cycles also turnover with incredible speed. Investors preach patience, but actually practice urgency. With the pressure of these two clocks running in the background, it’s no wonder that acceleration feels like the right move, even if logic says otherwise. This perceived need for speed causes startups to begin optimizing for the metrics that get applauded, rather than those that truly spell success. When you start seeing quarterly decks that speak only to lead volumes, new logos and even cARR (contracted revenues) but with no mention of customer value creation, burn, & NRR – chances are speed is winning out against true durability and compounding value.
As if all this didn’t already stack the odds against someone choosing the longer, slower, better path, there’s also a real psychological phenomenon called hyperbolic discounting. It’s the idea that humans systematically overvalue near-term relief (e.g., a funding round, a growth spike, a press cycle) against a larger, slower payoff.
But despite all the pressure and appeal of moving quickly, there’s one truth that’s been proven time and again: the founders and investors who tolerated the pain of slowing down to speed up are disproportionately those who win.
Case Studies: Founders Who Played the Long Game
To illustrate how this has played out over the past decade, here are some real examples of who has gone fast, who has been slow and steady, and who has undeniably won the race.
Example 1: Product-market fit over velocity
Win: I mentioned them before, but their success story bears repeating. Superhuman deliberately capped signups at 100/week in 2019 despite a 180K-person waitlist, built around a homegrown NPS engine. The company reached $100M+ ARR by 2023 with top-tier retention.
Casualty: Quibi raised $1.75B, launched April 2020, burned roughly $200M/month, hit ~500K paid users against a 7M target, and shut down after six months (October 2020).
Example 2: Betting on a near-death restart instead of forcing the original plan
Win: Notion nearly died in 2015. The team was laid off, the founders relocated to Kyoto and rebuilt the product from scratch on a $150K personal loan. They relaunched in 2016 and grew to a $10B valuation through word-of-mouth.
This makes the case for founders willing to eat a full reset rather than force speed on a broken product.
Example 3: Refusing the ticking clock of outside capital
Win: Mailchimp took $0 in venture capital over its full life, rejected acquisition offers, and sold to Intuit for $12B in 2021 for the largest exit ever by a bootstrapped company.
Win: Zapier raised one $1.3M round total, stayed profitable for most of its history, and reached a $5B valuation in 2021 without the VC hamster wheel.
Win: Basecamp/37signals has been going strong for 25+ years, with no VC. They capped their internal team at ~80 employees, and chose profit over growth as explicit doctrine while competitors burned cash to “win” the market.
Casualty: WeWork: WeWork was SoftBank-fueled and followed a growth-at-all-costs approach. The company reached a $47B peak valuation, which ultimately collapsed to under $3B. They had to file Chapter 11 with $19B in liabilities.
Example 4: Bootstrapping until the metrics say it’s time
Win: Calendly ran on ~$200K of Tope Awotona’s personal savings for around eight years with no institutional funding before raising $350M at a $3B valuation in January 2021. At that point, they were funded from strength, not desperation.
Example 5: Treating a pivot as compounding, not failure
Win: Toast spent its first two years (2011–2013) failing as a consumer payments app before it pivoted to restaurant-management software once the founders understood the real problem. The company hit 1,000 customers by 2015 and had a successful IPO in 2021.
The “failed” years were the R&D that made the eventual product right.
Example 6: The extreme end of speed pressure
One more cautionary tale, which wasn’t a loss in the startup-failure sense but still demonstrates the dangers of forced velocity. We’ve all heard of the Theranos story. The company’s entire pitch was speed (results in hours, not days).
We can’t pretend to know what role the pressure to deliver faster results played in the decisions made inside Theranos, or draw a straight causal line from velocity to fraud. But Theranos is still an extreme example of what can happen when the promise of speed gets too far ahead of proof.
The company kept selling a future that its technology could not reliably deliver, and the pressure to preserve that story ultimately ended in fraud convictions (and apparently a new documentary rated R for nudity??)
What the Long Game Looks Like, Operationally
Convinced by the power of compounding, but not sure how to translate this into operational action? Here are a few tactical things you can do.
First, gate your growth spend behind retention proof, not pipeline hope. This is borrowing a page out of Superhuman’s book, and it’s one of the most strategic steps you can take.
Second, treat profitability/capital efficiency as a strategic weapon, not a fallback for companies that “couldn’t raise.”
Third, let pivots run their course before declaring a thesis dead. The willingness to eat one or two “lost” years is often the tuition for the version that works.
And fourth, for investors specifically: separate “does this need capital to survive?” from “does this need capital to look good in my next fund deck?” Be honest about which one is driving the check.
When Speed is Warranted
Of course, I’d be remiss if I made it sound like velocity never pays off, because that simply isn’t true. Genuine winner-take-most moments, especially those driven by strong network effects, can require a land grab. Once the underlying thesis is proven, moving too slowly can be every bit as dangerous as moving too quickly.
The more useful distinction is between speed of learning and speed of scaling. Learning is cheap and reversible. Ship something, test it, talk to customers, kill what doesn’t work, and iterate again. There’s very little virtue in doing any of that slowly. Scaling is different. Hiring hundreds of people, multiplying acquisition spend, expanding into new markets, or building a cost structure around growth that hasn’t been proven is expensive and much harder to reverse.
In fact, almost every winner above moved quickly when it came to learning. Superhuman built an engine specifically designed to measure and improve product-market fit. Notion scrapped what wasn’t working and rebuilt. Toast changed direction when its founders learned where the real problem was. What they resisted was scaling faster than the evidence warranted.
The truth is, in today’s market, intentionality is having a renaissance. Those that understand that customer value is paramount. They take the time to dial in their understanding of what their customers need, as well as their ability to provide it, and then ensure they can provide it at scale. That’s how you play the long-game and ultimately compound the value of an organization.
This isn’t a condemnation of speed, instead it’s an argument for being deliberate about speed, and where it belongs.
