Scarcity can give your business a competitive advantage. To be sure, there are certain kinds of scarcity -- lack of ambition, insufficient talent, too little time before you burn through your remaining cash -- that foreshadow your company's demise.

However, there are other kinds of scarcity that can make your company much more successful than more resource-rich rivals. How so? A company with substantial revenue streams from well-established product lines lacks the sense of urgency that drives the founder of a fast-growing startup.

This lack of urgency leads to slower growth which penalizes

  • Employees -- the best of whom bolt for faster-growing rivals;
  • Customers -- who pay too much for products that underwhelm; and
  • Investors -- who suffer as the value of the company's stock lags that of faster-growing rivals.

In a study of 37 publicly-traded technology companies, I discovered wide variations in their revenue and stock price growth.

For example, while the average company enjoyed 20.9 percent compound annual revenue growth and 25.4 percent stock price growth between 2010 and 2020, the top performing company, Shopify, saw its revenue and stock price soar 82.1 percent and 93.2 percent, respectively. Meanwhile the worst performer, Xerox, suffered average rates of decline of 10.7 percent and 0.1 percent in its revenue and stock price growth, respectively.

What makes the difference between the top performers and the rest? I think it is their ability to apply a startup mentality -- resourcefulness, creativity, and doing quick, cheap experiments -- to succeed in a world of scarcity.

If a large company can keep thinking and acting in this way, it will sustain faster revenue and stock price growth. Here are three kinds of scarcity and how big companies use them to spur faster growth.

1. Scarcity of time to coast on growth of current market segments.

Few markets keep growing at double digit rates. This means that if a company gains a significant share of such a fast-growing market, rivals may jump in, cut price to gain market share, and quickly saturate all the latent demand.

To fight this time scarcity, the fastest growing businesses have created management processes that enable them to capture new, high-growth markets before the old ones decline. As I wrote in June, ServiceNow does this very well. 

The Santa Clara, Calif.-based supplier of workflow-management software is near the top of my list of technology companies -- with a 59.2 percent average annual growth and 44 percent stock price increase in the decade from 2010 to 2020.

ServiceNow extended its initial product -- which manages IT service tickets -- into adjacent markets such as IT operations, human resources, and finance. ServiceNow has also added new technical capabilities -- such as artificial intelligence and analytics -- that customers wanted to buy.

The takeaway? ServiceNow's strategy of growth through expanding into adjacent markets -- rather than acquisition -- is an effective response to time scarcity.

2. Scarcity of management bandwidth to invent new markets.

Very few executives have the bandwidth required to invent entirely new markets that create new growth for large companies. Such leaders -- such as Steve Jobs and Jeff Bezos -- are rare and highly prized.

Reed Hastings, CEO of Netflix -- whose revenue and stock price growth averaged 27.5 and 35.5 percent, respectively, over the last decade -- has done this as well. As I wrote in June, Hastings invented its DVD-by-mail business then created an entirely new one -- online streaming -- which required different corporate strengths.

Netflix overcame scarcity of management bandwidth to invent new markets in two ways. First, it created a culture that attracts the best people and delegates most decisions to the talent. Second, since Hastings freed himself from most decisions, he used the mental space thus liberated to envision and capture an entirely new market. 

3. Scarcity of employees who can meet quarterly targets and invent new revenue-generating products.

The most successful large companies do two seemingly contradictory things: hold people accountable for meeting quarterly revenue and profit targets and encourage them to quickly invent new revenue-generating products.

To do both, companies must have a culture that attracts enough talented people and operate processes that consistently drive that talent to achieve both goals, As I wrote in May, Atlassian, a provider of project management software, has mastered this art -- sustaining 40 percent average annual revenue growth during the decade ended 2020 as its stock increased at a 53.4 percent average annual rate.

Atlassian attracts talented people who act like entrepreneurs. Through various kinds of hackathons, Atlassian invented 14 new revenue-generating products that solved unmet customer needs. At the same time, the company regularly exceeds quarterly financial expectations.

Overcome these three sources of scarcity, and you can outgrow your peers.