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posts/2024-01-09-startup-rocket-equation.md

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+# The rocket equation for startups
+
+Startups love being compared to rocket ships. Let's take that analogy where it has never gone before.
+
+## The tyranny of the equation
+
+For the unfamiliar, the [rocket equation](https://en.wikipedia.org/wiki/Tsiolkovsky_rocket_equation) describes how much total mass ($m_t$) your rocket will be if you want to get a payload of a given mass ($m_f$) up to a given velocity ($\Delta v$), if the exhaust velocity of the fuel is $v_e$. It turns out to be exponential, which makes going to space quite expensive:
+
+$$
+\begin{align}
+m_t = m_f e^{\Delta v / v_\text{e}}
+\end{align}
+$$
+
+In plainer words, to carry some stuff to space, you need to carry some fuel, but to carry _that_ fuel, you need to carry some more fuel, and so on. To leave the gravitational pull of a planet, you need to reach a minimum velocity, called the _escape velocity_. As the required velocity increases, the required mass increases exponentially.
+
+When an organization hires more people to do more work, it must also hire some people to support these new people, who in turn might need to be supported by a few more new people, and so on. If you take the rocket analogy literally, the size of the organization must grow exponentially relative to the amount of work that needs to be done.
+
+If you have worked at a rapidly growing startup, you have probably experienced this. You spend ever more effort hiring and training people, and yet there are never enough people to work on everything and support everyone. In the extreme case, it can feel like a paradoxical machine where everyone is busy hiring and training new people so _they_ can get the work done that no one is doing because everyone is busy hiring.
+
+## How to leave the gravity well
+
+Startups of course don't usually[^1] want to grow their size exponentially. Still taking the equation quite literally, there are a few ways around it:
+
+**Use more efficient fuel**. There are many ways to translate this: hire people who need less support. Focus on doing fewer things. Sell to bigger customers.[^3] Build on free technology and content.[^2] Hire generalists who can fill multiple roles.
+
+**Lower the escape velocity**[^4]. If we take escape velocity to mean survival of the company, lowering it could mean picking a different business plan, a different mechanism of funding, or pivoting to a market with a lower floor.
+
+**Launch smaller rockets**. This doesn't relieve you of the exponential growth rate, but it gives you more attempts at finding the parameters of a successful launch. This is more commonly deployed _after_ an organization is feeling the effects of rapid growth. Tiger teams, two pizza teams, moonshots, 20% time, hack days etc. are all variants on the same desire – send out smaller rockets and see which ones make it.
+
+## Back on planet earth
+
+As promised, I've stretched the analogy to [max q](https://en.wikipedia.org/wiki/Max_q). It amused me how far it held up as I was noodling with it, so I wrote it down. Hopefully, next time someone offers you a seat on a rocket ship, this will inspire a little chuckle.
+
+[^1]: Pre-2023, some startups did appear to be manifesting their higher valuations by hiring a lot of people very quickly.
+[^2]: Arguably, many of the largest consumer software companies succeeded by figuring out novel ways to extract value from information and technology that was shared for free by someone.
+[^3]: Most tech companies attempt a pivot to selling to big enterprises sooner or later.
+[^4]: Interestingly, since escape velocity is independent of mass, load-shedding (i.e. layoffs) does not actually lower it.