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Business hypergrowth explained

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Last editedMay 20222 min read

Hypergrowth represents the ultimate business success, but remains a rare occurrence for the majority of entrepreneurs, business owners and investors. But while such a fast rise to great success remains rare, it is not impossible.

In fact, there strategies that can be applied to give a business the best possible chance at achieving hypergrowth. Here we will explain exactly what hypergrowth means and you can achieve it.

What is Hypergrowth?

The term was originally coined in 2008 in the Harvard Business Review where it was described as ‘the steep part of the S-curve’ that represents massive short-term growth in a new market or industry. A business experiencing hypergrowth will expand and scale up at an extraordinary pace, often becoming the global leader in a field seemingly out of nowhere.

The term builds on the previously established term of ‘rapid growth’, which applies to businesses experiencing a compound annual growth rate (CAGR) of between 20% and 40%. According to the World Economic Forum, once a business has a CAGR above 40%, they are experiencing hypergrowth.

The rise of Zoom is one of the most recent and well-known examples of hypergrowth. Obviously aided by the Covid-19 pandemic forcing everyone indoors so meetings had to be conducted via video, Zoom’s hypergrowth is still spectacular. It is especially so as before the pandemic, Skype was the dominant video conferencing software. But Zoom’s focus on customer feedback enabled it to produce a much better product at the perfect time.

The Three Stages of Hypergrowth

Economists and business leaders have identified the three common stages of hypergrowth, which can help entrepreneurs understand how to achieve it. The three stages are:

  • Edison

  • Model T

  • P&G

Edison

The first stage is all about figuring out if your idea is even viable as a candidate for hypergrowth. Can the product be built, marketed, and all operations scaled up enough to accommodate hypergrowth? The Edison stage is named after innovator Thomas Edison as it is a product development phase, although one that must also consider long-term project management requirements.

Model T

The second stage assumes you now have a viable product, and is concerned with the logistics of actually bringing it to market. This stage is named after the Model T car developed by Henry Ford. The car wasn’t a new invention at this point, but Ford figured out how to bring it to the masses. So this stage is about figuring how to manufacture the product to the degree you will need to in order to have a chance at achieving hypergrowth.

P&G

The third stage of hypergrowth happens after you grow beyond your initial audience and begin to compete on a global level. Obviously you will need to massively scale up your product, but you will also have to deal with more competitors. The competition intensifies dramatically at this level, so you will need to further innovate your product and introduce new complementary products that help establish your brand as a world leader in your niche.

Hypergrowth and happy customers

While there are many variables involved in the success of the different companies that have experienced hypergrowth, there is always one consistent similarity. That similarity is that they all had a strong focus on making the customer happy by providing them with the very best product possible.

Without this element, hypergrowth just isn’t a realistic expectation for any business. So listen to customers, learn from their feedback and use it to constantly and consistently improve your product and grow your business.

We can help

If you’re interested in finding out more about business hypergrowth, or any other aspect of your business finances, then get in touch with our financial experts at GoCardless. Find out how GoCardless can help you with ad hoc payments or recurring payments.

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