Hypergrowth for Product-Led Businesses
Some start-ups hit the jackpot. Something about their product gels with the market and suddenly they’re growing at an astonishing rate, selling more than expected and having to adapt their initial business plans. This is called hypergrowth.
What is Hypergrowth?
The term ‘hypergrowth’ was first coined in 2008 by Russian author, Alexander Izosimov. Defined as “the steep part of the S-curve that most young markets and industries experience at some point, where the winners get sorted from the losers”, it is essentially an extremely high and compounded rate of growth over a short space of time. (HBR)
The World Economic Forum has since provided a more concrete, data-driven definition of hypergrowth: any business which has a CAGR (Compound Annual Growth Rate) of over 40% and double their revenue in less than two years. (World Economic Forum)
Take Zoom as an example: initially released in 2012, its hypergrowth phase didn’t kick in until the Covid pandemic. While the company had previously been relatively successful, the pandemic led to a meteoric increase in its user-base. First-time downloads grew by 728%, Zoom’s customer base increased by 61% and as a result, the company experienced a more than 100% stock price rise. (Drift)
While this example stemmed from an unprecedented global market change, there are still important lessons to be learned from Zoom which can be applied to any product-led business aiming to achieve hypergrowth.
How to Achieve Hypergrowth?: Lessons for Product-Led Businesses
When it comes to achieving hypergrowth for your business, there are some basics to keep in mind.
- Be customer-driven
Any product-led business has to be focused on winning and retaining customers. The common thread throughout all successful hypergrowth businesses is that the customer experience has been a focal point of their strategy.
Keep your metrics simple and ensure that your business is hitting all its key markers. Hypergrowth periods are not a time to overcomplicate matters, rather a time to focus on promoting what you are doing right.
- Asses the marketplace
While your business does not need to be a unicorn, it should be providing something different to what competitors offer.. When aiming for hypergrowth, look into what competitors are offering and adapt your proposition to fill in the gaps.
- Be adaptable
This one is significant, especially with the likes of Zoom. When office-based businesses’ requirements changed across the world, Zoom was able to pivot and offer something different to Skype, putting them at a distinctive advantage. (Medium)
Ensure you are able to adapt your offering to capitalise on areas of particular interest. If customers are flocking to your product because of a particular feature, it could be worth adapting the original strategy to pay more attention to what is working.
- Ensure you’re showcasing the best of your business
All the previous points are null and void unless you’re showcasing the best of your business externally. Highlighting the key features and showing why your product is easier to use or more efficient than direct competitors is key to product growth.
While this is usually accompanied by word-of-mouth recommendations, it will never be enough on its own to hit the dizzying heights of hypergrowth.
- Outsource where required
As Shikhar Ghosh highlights: “during hyper-growth phases, adopting an ‘I can do it all faster’ attitude and repeatedly putting off establishing processes ultimately stunts your growth.” (Harvard Business School Accelerate)
Hypergrowth is a time in any business lifecycle where there are countless spinning plates and every day presents a new challenge.
While many start-up founders take their work home with them and invest all their time, money and effort into it, hypergrowth is a period where relinquishing some control is a necessity.
Bringing in trusted professionals to manage and guide the business will remove roadblocks, while still ensuring the above conditions are still satisfied.
Stratagem Solutions offers growth hacking strategies and bespoke services for product-led start-ups - get in touch to find out more.
Advantages and Disadvantages of Hypergrowth
The obvious upside to hypergrowth is a huge spike in sales. This is helpful for revenue, and will also keep investors happy.
It’s also an opportunity to learn. Business hypergrowth demands efficiency. You will quickly understand what is working in your business and what isn’t, whether that’s the product itself, a business process or your company culture. Embracing the chance to learn from this period will help when forming future plans.
On the flipside, hypergrowth has the potential to make or break a start-up business. A business that’s founded on the wrong principles or without the right leadership may crumble under the pressure. An unexpected increase in user base and sales in a short space of time requires expansion on an operational level. This level of scale can lead to panic, and long-term decisions being made without time to plan too far in advance.
Flexible, agile businesses may not have such a concern. If you’re able to adapt, you will be able to overcome the challenges presented.
How Stratagem can help
If you need help traversing the early stage start-up path, Stratagem is here to support you. We perform full business audits and can make recommendations including metric tracking, product growth proposition, messaging, audience targeting and business goal modification.
We combine data with tools and tested techniques to create bespoke growth strategies suited to your business.
Need help to grow? Learn more about our solutions.