Context:
Last week, I wrote about why AI app companies are growing at breakneck speed. There’s one genuinely exciting reason: selling real work (not just features or access) means you can attack bigger budget line items with a much stronger value prop. But there are also three less inspiring reasons for this growth: razor-thin or non-existent margins, the illusion of unlimited budgets, and—let’s be honest—some pretty funny numbers. Against this backdrop, the meme of the week was whether “momentum is a moat.” Spoiler: it’s not.
Market Signal:
The current market is awash in companies touting rapid growth, but much of this is manufactured velocity—revenue and product launches that look like momentum but are really just speed for its own sake. The difference between companies that are actually building something durable and those chasing hype is whether their momentum is anchored in important, heavy work. Most early-stage companies don’t have moats, and speed alone doesn’t create one.
Takeaways:
Momentum ≠ Moat: But, as Alex Immerman said, “momentum is a boat”—it’s what gets you to the island where you can actually build a fortress.
Speed vs. Momentum: Most people conflate momentum with velocity, but in physics (and startups), momentum = mass × velocity. You can move fast, but unless you’re moving something important (mass), you’re just running on a treadmill—or worse, off a cliff.
Momentum as Output: True momentum is the result of doing important work quickly; it’s not just an input or a vanity metric. It’s self-reinforcing when it’s real, but it can’t be faked.
Empty Speed: Much of the “momentum” we’re seeing is empty—velocity masquerading as progress to gin up hype, fundraising, or customer numbers. It doesn’t last because it’s not rooted in important work.
Asks:
If you’re an operator: Ask yourself, are you building mass and moving it quickly, or are you just running fast?
If you’re an investor: Are you underwriting real momentum, or just speed dressed up as momentum?
For everyone: Let’s focus on building boats that actually get us to the island, not just running laps in the harbor.