When most business owners think about achieving and sustaining hypergrowth, the analogy they often use is of a drag race. To succeed, companies jump on the gas pedal and keep it pinned to the floor, speeding in a straight line as quickly as possible.
In the real world, hypergrowth can be achieved this way too. Companies effectively add nitromethane fuel to achieve amazing market penetration in very short periods of time, but crashing and burning is common as companies exhaust resources and constantly have to raise funds to pay for growth.
True hypergrowth is more like a stock car race. The overall idea of getting to the finish line with basic equipment as quickly as possible is the same, but winning requires thoughtful strategy. You have to know when to change tires and when to slow down going into corners.
The real way to achieve sustainable hypergrowth is through disciplined restraint. Establishing and proving product-market fit is the goal, rather than just introducing a bunch of noise into the system. This will also let you prove to customers and investors that you are capable of executing on a vision, and you will earn their trust.
Prove that you can execute and become the best-in-class
In Podium's early days, we got a lot of enthusiastic responses when we introduced the product. At the same time, we were also met with questions and ideas about expanding and adding to the initial product. We felt pressure from everywhere to create something sexier, especially when Podium was accepted into Y Combinator and we were surrounded by all of these aspirational ideas.
Our adviser reminded us that we had an actual, established idea that was more likely to be successful than all of the other projects in the room. His thoughtful, timely advice helped us see our advantages and understand that we had something unusual: a working product.
It takes a lot of faith to stick with something that is successful but not flashy. Embracing our product at Y Combinator required exercising restraint on both internal expectations and external hopes. It also taught us that the key to kicking off hypergrowth is executing on a basic idea and becoming best-in-class when you have limited resources.
It is important to pursue tangible learnings and advice in order to create a framework that you can build around. Once you begin fundraising, then you will have a much greater opportunity to take your wild, sexy ideas off of the shelf.
Test and evaluate everything, all the time
It's easy to follow a path that seems to be leading you in the right direction, but in order to maintain hypergrowth, it's essential to watch for reality checks and pay attention when they appear. There is a tangible "danger zone" for growth, which is when you have a little bit of runway but still have to keep reloading with new investments.
This uncertainty is why it's essential to constantly test and evaluate your ideas, and always be on the lookout for ways to do it better. You can have more than $40 million in ARR as a SaaS company but still not have product-market fit.
Major societal shifts are always times of change, and there are opportunities for smart companies to grow by providing necessary innovations. For example, the rise of faster computing was a major shift that impacted the world in many ways, including our entertainment. Blockbuster Video used to be a global company, and you could find independent video rental stores on every corner, but easy access to streaming video took out an entire industry, where Netflix is now on top.
Could anyone look at the changes in computing and entertainment since Netflix was founded (1997) and assume the streaming king will never be challenged? Of course not, and your business is no different. By testing and evaluating all of the time, you can determine which shift is appropriate for building your business. When you find it, conduct your growth in the smartest way you can.
Know which ideas will take you to the next level
Once you are ready to begin the process of fundraising, the next key to hypergrowth is knowing how to bet on your company. Generally speaking, you need to have 10X bets on the table that are proportional to your business size. In other words, if your company is valued at $100 million, your question is: What ideas do we have that will take us to $1 billion?
Just like a new level of a video game, the goal of executing on 10X growth becomes more challenging as the company grows. It's not just that your bets need to be increasingly larger -- although creating a 10X idea from your previous 10X idea is a major step -- but time frames shrink, finding the right people becomes more specialized, and expectations grow.
The ur-example of continually executing on 10X strategies is Apple, which placed major bets on new technology with product-market fit rather than sitting on its laurels. The company that founded the personal computer ecosystem might have been satisfied with their place in the history books, but instead doubled-down on the iPod and then the iPhone, both of which continued Apple's strategy of changing the world.
Hypergrowth requires more than just a great idea and driving in as fast as you can in a straight line. When done right, sustainable hypergrowth with product-market fit is possible. It requires executing on fundamental ideas to become best-in-class, constant testing, and understanding the path forward.