Why velocity resets to near-zero for a new team
A newly formed team, or a team with a significantly changed roster, has no meaningful velocity history yet, since the number is specific to how that particular group of people estimates and executes together. Expect several sprints of noisy, unreliable velocity data before it stabilizes into something forecastable.
The difference between velocity and capacity
Velocity is a historical output measure (points completed), while capacity is a forward-looking input measure (available person-hours for an upcoming sprint, accounting for holidays, planned time off, and meetings). A sound sprint plan considers both, since a team's historical velocity assumes roughly typical capacity, which a specific upcoming sprint might not have.
Frequently Asked Questions
Is a higher velocity always better?
Not by itself. A rising velocity number can reflect genuinely improving efficiency, or it can reflect point inflation from a team padding estimates, and the two look identical on a chart. Velocity should be interpreted alongside actual delivered outcomes, not read as a standalone success metric.
How many sprints of data do I need before velocity is trustworthy?
Most teams need at least 3-5 completed sprints of relatively stable team composition and work type before an average velocity becomes a reasonably reliable forecasting input, since fewer data points are too easily skewed by one unusual sprint.