Annual planning is one of the most ingrained rituals in startups. It feels rigorous. It creates alignment. It gives boards and teams a clear number to anchor to.
But annual planning doesn’t match the speed of learning and adaptation a startup actually needs to survive and scale.
What works for a $10B public company — with stable markets, predictable systems, and slow feedback loops — doesn’t work for a company still discovering how its engine really runs. That mismatch quietly drives bad behavior: premature hiring, reactive spending, and doubling down on broken systems instead of fixing them.
Why Annual Planning Fails in Startups (and the Bad Behavior It Creates)
Public companies plan annually because they have to. They’re massive, complex organizations. Executing a strategy takes years, so the strategy better be right.
Startups don’t have such constraints. They learn something new every day — and they can adapt immediately. So, in reality, copying big-company planning processes removes one of a startup’s biggest advantages.
The most common failure pattern looks like this:
Build a detailed bottoms-up plan in Q4.
Miss the plan in Q1.
React by hiring faster to “catch up.”
Fall further behind because the underlying system is broken.
When startups miss numbers, it’s rarely a lack of effort or headcount. It’s almost always a system problem. Demand generation, conversion, or customer value creation isn’t working as expected.
Hiring into a broken system doesn’t fix it. It just digs a deeper hole.
Manage the Business Quarterly with the “Stay-or-Go-or-Slow” Approach
The answer isn’t abandoning annual planning. It’s changing how you use it.
The goal of the “Stay-or-Go-or-Slow” approach is simple: Manage a rolling four-quarter plan using the most recent quarter of real performance data.
Instead of locking into assumptions made nine months earlier, leadership teams and boards continuously adjust the pace of growth based on the current health of the GTM system.
This means that you’ll still:
Build an annual plan
Align the team, and
Hold people accountable
But you stop treating the plan as an immutable truth, and instead, treat it as a hypothesis — one that gets tested and recalibrated every quarter.
How “Stay-or-Go-or-Slow” Works
The operating motion is straightforward, and follows three main steps:
Step 1: Build the Annual Plan
Do the work. Align the team. Set clear goals and accountability.
Step 2: Pre-Agree on “Go / Stay / Slow” Criteria
At the beginning of each quarter — when emotions are low — the exec team and board agree on the metrics that will determine pace.
Go: What would we need to see to increase the pace of growth?
Stay: What would tell us that the current pace is working?
Slow: What would cause us to temporarily slow or pause growth?
Note that pre-agreement matters: It allows judgment to happen with a clear mind, and it also prevents emotional, knee-jerk reactions later.
Step 3: Review Results and Re-Plan Four Quarters Out
After the quarter ends, evaluate performance, adjust the rolling four-quarter plan, and set the next quarter’s “Go / Stay / Slow” criteria.
A Common Way to Define “Stay-or-Go-or-Slow” Criteria
Most teams anchor criteria in three system-level performance areas:
Demand generation: Are we creating enough quality opportunities to support growth?
Demand conversion: Are reps converting opportunities into revenue at expected rates and sales cycles?
Customer value creation: Are customers realizing the promised value — and therefore positioned to renew and expand?
Rules of decision-making are as follows:
Go faster if all metrics are green.
Stay the same if none are red.
Slow down if any turn red. Fix the system as quickly as possible, then re-accelerate. Don’t wait for the next quarter.
And remember: You’re probably not going to sell the company or take it public this year. When you do sell it, no one will care what the growth rate was from Q1 to Q2 five years earlier.
Why This Improves Board and Leadership Dynamics
This approach fundamentally changes the conversation: Rather than defending misses, teams diagnose root causes. And instead of fear-driven catch-up behavior, leaders make confident, data-driven pacing decisions.
Below true scale, every startup is fragile. The engine can break at any time, and it will. The only way to manage that risk is to instrument inputs, review them frequently, and adjust speed deliberately.
And remember: You’re probably not going to sell the company or take it public this year. When you do sell it, no one will care what the growth rate was from Q1 to Q2 five years earlier.
In Short:
Take your medicine.
Diagnose the system.
Fix it.
Then get back to accelerating scale.
Agree? Disagree? Have an opinion?
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