written by Fabiano
6 min read

How to find the path to external momentum

Structure

Quick intro 

What’s the problem?

Recently I listened to a podcast in which Anne Mahlum, founder of Solidcore, a company owning a chain of Pilates studios in the US, spoke about her building up the company before selling it for almost 100 million dollars a decade later. 
What I took away from the conversation was that she described key moments in which she realized the big potential of her business. These were moments when she decided to amplify her strategy and take calculated risks to follow the potential. Anne Mahlum described it as gaining momentum. For example, when she opened her first pilates studio, the courses were immediately sold out, the press was publishing articles about the studio, and she used the momentum to continue to build more studios and grow the company. This phenomenon where a significant number of customers get excited about your product is often called 'getting hype,' 'going viral,' or 'gaining traction’. There might be slight differences between all those terms: For example, does 'getting hype' or 'going viral' not directly include your response to it, while ‘traction’ or ‘momentum’ often involves strategic actions that build upon each other and accumulate into an avalanche. Either way, I think gaining external momentum is a desire a lot of entrepreneurs thrive towards to get to the next step with their business. How can founders develop a strategic framework that supports the chase for external momentum around their brand or product?  

Some might argue that product-market fit and external momentum are the same. But I think that external momentum refers to the combination of the initial spark, hype or excitement about your offerings over a significant period of time and your short-term actions in response to it. As Anne Mahlum said, it’s the moment when you realize that your idea is taking off. Product-market-fit might be the next step after external momentum, really doubling-down and sustainably satisfying the market demand.

Own background

What’s my context/experience?

In my entrepreneurial journey I had limited periods of external momentum. And if there were periods, they didn't last long. I think my business (Livria, a community and platform for underground musicians and fans) is a good example for still thriving on internal momentum, meaning on my team’s and my drive, vision and motivation to build something important and valuable. The growth curve is flat rather than represented in spikes. And we are still experimenting on which business model and approaches to fully focus on. We’ve evaluated the problem, but haven’t found a solution to it yet that really resonates with our target groups. So in the upcoming months it’s crucial for us to build product features or offerings we can fully commit to. Therefore, we are following a scientific approach of testing our assumptions and move to the next opportunity if we consider it to be unpromising (also inspired by the famous Lean Startup Approach). The big challenge about this approach is to define a reasonable threshold for when we consider an opportunity not promising. And to avoid making early assumptions and cut opportunities that we have probably just not followed consistent enough.

So when to remove an opportunity path (or throw away assumptions) and move to the next while thriving towards achieving external momentum? And how to avoid being inconsistent in following those opportunity paths?

We don’t want to give up on specific product features, ideas or business models without having put a reasonable amount of work and experimentation into it. If we derive our insights too early, we might miss a big opportunity. For example: with Livria we built a prototype to test if lovers of underground music would like to pay for exclusive content from their favorite underground musicians. To test their willingness to pay, the prototype consists of a page with exclusive content and our offer that we will put together similar pages in the future for a given price. In this example, we want to evaluate that our business model is fruitful. But what are the indicators for big potential? How many paying customers out of 10 would be a good sign? Does it have to create big hype about our page? What are other hidden factors that would influence the success of our prototype that we are missing? Will we throw away a good idea too early, before iterating enough on the details?

My approach

How do I tackle it?

A significant portion of business success, including market trends and hype, can be attributed to randomness (can highly recommend Fooled by Randomness by Nassim Nicholas Taleb which dives deep into that topic). Taking this into account, I don’t want to overcomplicate things in figuring out how to build external momentum, as at the end it might heavily rely on external factors that are not in our circle of influence. Therefore, my approach to tackle the path towards momentum is to follow a framework based on consistency, experimentation, data and intuition. 

Experimentation:
Eric Ries's The Lean Startup has become a bible for founders. It provides a scientific approach to testing assumptions in the market. Based on Eric’s framework, for each experiment you start with an ideation and the formulation of hypotheses. In the second step the founder team has to build a MVP (minimum viable product) that represents their assumptions in the form of a testable artifact. To test the assumptions the MVP will be put in front of users to collect feedback. At the end of each experiment the feedback will be used to evaluate the assumptions, reflect and get ready for the next round of experiments. 
I assume that the more experiments you run while following this reflected and rigorous approach, the higher your chance in finding a product, feature or other opportunity that leads to external momentum. 

Data:
Data goes hand in hand with the experiments. Data ensures you don't miss opportunities for external momentum by being blind to the numbers. And data does not have to be fancy charts and visualizations, I think in some cases it can, for example, also be the direct responses or purchases from your target group. Data allows you to define thresholds. Those thresholds can work as reminders, goals or as stop signs to indicate that you should move on to the next experiments. Besides that, data is just a nice instrument to make decisions with no emotional attachment. You might continue to believe in a particular feature of your product (due to multiple possible reasons: vision, intuition, optimism, but maybe also ego, ignorance or blindness), but your data shows you the painful reality. Especially for small teams, data can serve as an objective voice, waking you up and pushing you to change directions.

Intuition:
Intuition is the most abstract point in our framework. For me it’s difficult to define and explain it. But still, there is a particular gut feeling that leads your way sometimes. It might be wrong and lead to mistakes and failure, but from time to time it learns and gets better based on your experiences. And I think it’s a journey everyone has to go through: on the one hand developing your intuition and on the other hand learning how to trust it. Writing in journals, reflecting on long walks or talking with friends and colleagues helps me to identify past moments in which my intuition failed, was ignored by my ignorance or did a great job. It sets me up for future situations in which I should pause first and listen to my intuition before making a decision. And also, to identify when ego, desire or other emotions come up to intervene. 
For sure, intuition is probably not enough to make decisions, gain external momentum and build a sustainable business. However, combined with data, intuition can provide valuable guidance for crucial decisions.

Consistency:
Building a bootstrapped lifestyle business probably means that you have time and no investors demanding quick profits. Ideally, you’re working part-time and besides enjoying your life with friends and family, you have time in the mornings or evenings to work on your own business. You probably don’t have to hit your first million in the next six months, one, two or three years. You have the flexibility to pursue a long-term vision without the pressure of immediate, significant financial returns. Therefore, you can leverage the power of consistency to gain external momentum. Developing specific knowledge and building businesses around it for a long period of time might increase the chance of an event of external hype or finding the path to external momentum. You can increase the possibility of success by sticking around in the same industry, getting better each week, conducting a variety of experiments, collecting data and following your intuition.

External Momentum Framework

Inspiration I used for this article

Books, Podcasts, Articles, Quotes

Community Space

Your comments, ideas, feedback

  • Have you ever experienced a sudden gain of external momentum? What triggered it?
  • How do you balance data-driven decision-making with intuition in your business?
  • How do you determine when to abandon an idea and pivot to a new opportunity?
  • What role has consistency played in your entrepreneurial journey?
  • ...

Join the discussion below. Or write me an email to fabiano@40hourentrepreneur.com