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Being Average is Not Enough: Power Laws Rule Everything in Startupland

Marc Simard
May 30, 2023

At Setori, we provide simple engineering metrics to startups. Often, when looking at these metrics (like cycle time or deployment frequency) teams want to make sure they are not underperforming compared to industry averages.

Unfortunately, this is the wrong way to think about it. For startups, there are no participation trophies. Due to the near-zero marginal costs of software, many markets only have a few winners. Returns are distributed as a power law, not a bell curve. To get these returns, your performance must be elite - often in the top decile of startups.

The power law curve. The best companies earn outsized returns

While many factors influence a startup’s success (some within and outside our control), shipping fast is an incredible advantage. More chances at bat. More responsive to customer feedback. The ability to course-correct, to take advantage of new technologies, to build for new use cases or segments. 

As an engineering leader, building a high-performing engineering delivery engine should be your top priority.

If we can be helpful, please don’t hesitate to drop me a line at marc@setori.ai. We’ve helped many teams in the past - with or without our software - depending on their needs.

Let’s get it,

- Marc