Customer Experience, Customer Success | 6 MIN READ

What Is Hypergrowth (And How to Get There?)

What is hypergrowth and the secret to achieving it in a startup or a company? The best kept secrets revealed in achieving hypergrowth.

Niyathi Rao
May 11, 2021

Hypergrowth

Hypergrowth

Hypergrowth is a dream for many investors and entrepreneurs. Who wouldn’t like rapid, high speed, exponential growth that shines like a unicorn. There is a need for a unique capacity to manage and experience this surge of growth called hypergrowth. This unicorn rearing is also known as Hypergrowth. Here is all you need to know about hypergrowth- challenges, strategies that can propel hypergrowth and more.

What is Hypergrowth?

Hypergrowth is a phase of rapid expansion where companies experience a compound annual growth rate or CAGR of 40 % or higher. First coined by Alexander V. Izosimov in 2008 for an article in Harvard Business Review, hypergrowth means ‘the steep part of the S-curve that young industries experience that sets them from losers.’

In the product-market fit, hypergrowth occurs at Stage 4. Hypergrowth is essentially driven by market demand. This means that growth can occur always, but only if there is market demand- there will be hypergrowth. Companies on a hypergrowth wave can move quickly and adapt to continue. To quote the HBR definition, ‘the winners get sorted from the losers’ on that curve.

According to the World Economic Forum, hypergrowth is coined in a different manner. “During the past decade, as technological convergence has moved progressively forward, rapidly rising companies have astonished the global public with their ability to expand and scale at a pace that was previously unknown. From this phenomenon, the term “hypergrowth” was coined.”

So to make things simpler, take a look at this table below.

Normal Growth CompaniesCAGR is less than 20%
Rapid Growth CompaniesCAGR is between 20% and 40%
Hyper Growth CompaniesCAGR is more than 40%

Also known as blitzscaling, hypergrowth has three main componts-

  • Product innovation
  • Execution
  • Strategic focus

Hypergrowth Strategies By Fastest-Growing Companies

Here are some strategies that have helped fastest-growing companies fuel hypergrowth. As per he World Economic Forum, here are what 200 high-growth businesses prioritise for hypergrowth.

Product Innovation

Hypergrowth is driven by market demand as mentioned. So only an innovative service or product can create this increase. It may create a whole new market segment altogether. This is also known as product-led growth– where companies rely on product usage and features to drive customer acquisition and retention.

For example: Slack is a highly innovative product that has changed internal collaboration and made it intuitive for teams globally. The easy joining process also make their revenues grow from $0 to $4B in 4 years mostly through word of mouth.

Customer Centricity

Another aspect or strategy that drives hypergrowth is customer centricity. This is by actively listening, incorporating customer feedback and more into product development. This feedback has increased the chances of hypergrowth. Use data and metrics available to make the best of customer information.

Some metrics that can help track this include-

  • Customer lifetime value
  • Customer acquisition cost
  • Monthly active users

We will discuss more about customer success and hypergrowth later.

Scalable Business Systems

As per the WEF survey hypergrowth companies need to scale their businesses. A 35% of their challenge comes from scaling businesses. For example: Uber till 2013 had a cumbersome process for registering drivers online. Drivers has to visit the local office and apply to be a part of the company. This was made scalable with a web portal for signing in of new drivers. This helped expand internationally and redesign to fuel growth.

Focus on mission and Culture

For a company a team believing in them is the biggest thing. In case of any event, if the team believes in you chances of productivity and being engaged are more. This shows that engaging your team is important in expansion and growth. Increased employee retention is one of the drivers for hypergrowth.

The 3 Stages of Hypergrowth

The general notion is that there are three stages to a hyper growth. However, HubSpot has included a fourth stage called market saturation. The three recognised steps in hypergrowth include-

  • The Edison Stage
  • The Model T Stage
  • The P&G Stage

Another terminology by Nikhyl Singhal terms it as-

  • Phase 1: The Drunken Walk
  • Phase 2: Product/market fit
  • Phase 3: Hypergrowth

The Edison Stage

This is the first stage along the hypergrowth curve. Here the business is trying to see if its actually possible to build this product or achieve this result. The emphasis is on product development and project management. You need to know if its possible to bring this into reality.

The Model T Stage

The second stage is the Model T stage. This is where you check the product/market fit and ascertain how to bring it to the masses. For example: When WordPress saw the feasibility in bring blogging to the masses. This is the stage where you will have to spend some time. You need to examine your strategy based on resources and teams.

The P&G Stage

In this stage, you are dealing with a global audience. You need to deal with competition, scale the product, innovate it further, introduce new products to support that growth. It is also important to become an overall top category contender and also create a micro-niche that will help you dominate a specific segment. An example of this: Zoom has more than 200 million meeting participants in a single day. With COVID-19, Zoom has become a household name.

The Secret to Achieving Hypergrowth

Hyper growth in startups happens due to a single thread connecting them all. All the hyper growth companies aim to make customers happy. The key to the success of Zoom, Zappier and many more can be attributed to the strong focus on customer support and customer success.

Bottom Line

By listening to customer concerns, creating products for their happiness, optimising for their happiness and adapting to their requirements- you can achieve hyper growth. The secret key for hypergrowth success is ensuring that customer satisfaction and customer success remains central. Hypergrowth also comes with huge risks and challenges. By strategically handling processes, you need to scale your systems and culture to meet hypergrowth.

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Originally Published May 11th, 2021, Updated June 4th, 2021

Niyathi Rao

Niyathi is an experienced content marketer with a love for SaaS tech products. She reads a lot (mostly fiction) and is a huge news junkie. Niyathi loves exploring different forms of inbound marketing and taking on challenges.

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