5 Marketing Strategies That Can Lead Your Business to Achieve Hypergrowth
The term “hypergrowth” was first mentioned by the Harvard Business Review in its April 2008 issue. It defined the term “hypergrowth” as a steep growth rate of the S-curve that most markets and industries may experience at some point. But, it’s the winning brands that stand out from the losers. The companies that achieve hypergrowth quickly adapt and continue to move ahead.
The World Economic Forum has come up with a different definition for hyper-growth. According to the World Economic Forum, some rapidly growing companies have astonished the market with their ability to expand and scale at an unprecedented pace. This growth rate is known as hypergrowth.
So, what rate of growth does a company need to hit to qualify as a hyper growth company?
The World Economic Forum has claimed that businesses need to achieve business growth at a compound annual growth rate (CAGR), higher than 40%. That means achieving hypergrowth will require maintaining a more than 40 percent average annual growth rate for more than one year. On the other hand, “rapid growth” is defined as witnessing a CAGR of between 20 percent and 40 percent, and “normal growth” businesses have CAGRs of less than 20 percent.
To understand hypergrowth, we recommend understanding these three stages of growth.
The 3 Stages of Hypergrowth
The Three Stages of Hypergrowth
1. The Edison Stage
The first stage in hypergrowth is when businesses encounter the Edison Stage. According to Drift CEO David Cancel (DC), this stage is defined by the invention. As the name suggests, this stage is similar to what Edison had undergone when he was creating the light bulb. This is the stage when businesses should invest their time and energy in figuring out how they can work on building hypergrowth and the best ways to achieve growth.
2. The Model T Stage
The next stage of the hypergrowth is known as the Model T stage. This stage is similar to when Henry Ford took something previously invented and worked out on how to bring it to the customers. This stage is about building products and operational models that you need to build the product.
3. The P&G Stage
When a business is in the Model T stage, it can easily stand out in its niche. But to transition into the final stage of the Hypergrowth Curve, companies need to change their approach to deal with competitors and invest in building the brand.
There are two ways to grow in the third and final stage of hypergrowth:
- To grow to become a top contender in a category, for example, MailChimp with email.
- To establish a micro-niche market that could lead the way, consider the example of Seventh Generation and their organic/green laundry detergent.
Hypergrowth Strategies Used by the Fastest-Growing Companies
The World Economic Forum surveyed 200 high-growth businesses to understand companies’ unique priorities experiencing hypergrowth vs. those that are not. Here are some top-notch strategies that have resulted in hypergrowth for these companies.
Product or service innovation
Since hypergrowth results from rising market demand, an innovative product or service can drive an increase by creating an entirely new market altogether. Slack is one of the fastest-growing apps and a remarkable example of how an innovative brand can boost market demand.
Their mobile app platform has changed the way similar companies can collaborate internally. This is one of the improvements that drove Slack to achieve hypergrowth. Their groundbreaking “email killer” has fueled hypergrowth that its revenues grew from $0 to $4B in just four years by primarily leveraging word-of-mouth activities on platforms like Twitter.
Slack realized that when internal team members start collaborating on their platform, their entire network will begin using the tool.
Leverage data for customer centricity
Groundbreaking innovations that can fuel hyper growth require meticulous customer data analysis – that’s what Slack did under the leadership of its founder, Steward Butterfield. The company made its goal to listen to customers and incorporate their feedback into its product development process. These customer insights and feedback from early app adopters have helped Slack to achieve hypergrowth.
Therefore, use customer data to move in the right direction, irrespective of where you are on the growth curve. For example, a periodical increase in monthly active users (MAU) may indicate that your product is becoming an integral part of their lives, and they seem to enjoy it. Similarly, a high churn rate will mean that your product may not provide the value as intended.
However, keep in mind that the numbers alone won’t tell you the whole story – it’s just as necessary to qualify them anecdotally as Airbnb did. By interpreting what that data was telling them with real customer stories, they could use it more effectively to make intelligent business decisions that drove massive growth.
Focus on building scalable business systems
As per the survey conducted by the World Economic Forum, a major hurdle for many hyper growth companies arises during the scaling phase of their business. Crafting a successful business system capable of thriving at scale becomes a crucial component in attaining hypergrowth.
Until late 2013, people had to physically visit local Uber offices to fill out paperwork to become an Uber driver. Later as it grew, the process gradually slowed down and became cumbersome for scaling into new cities quickly. Therefore, Uber started analyzing their in-office application process by designing a website that enabled new drivers to sign up and get approval from their remote locations.
Then, as they continued to grow internationally, the differences in rules and regulations in different countries and regions slowed down the process. Then, Uber designed other overhauls in the driver onboarding process to survive hypergrowth.
Focus on culture and mission
According to LinkedIn, working at a startup is stressful – the average turnover rate for the tech industry is 13.2 percent (the highest of all sectors).
However, achieving (much less surviving) hypergrowth is challenging if you are continually replacing team members.
That’s why culture and mission are some of the most critical tools entrepreneurs have in their arsenal when they are in hypergrowth. Research shows that a mission your team believes in keeps them engaged and productive even in the face of adversity. For example, Bitcoin was growing in 2013, and Coinbase was recruiting rampantly to keep up with its growth. Within a month of a hike of $1,150 per coin, the price had been reduced by 50 percent. And Coinbase managed to maintain its growth for around four years. Khalid Halim13, the executive coach at Coinbase, has claimed that many employees stayed even in the face of heavy personal adversaries as they shared a common belief:
Since very few people left, the company grew by 216.7 percent year-on-year within the next three years. And the company also managed to avoid several problems such as security breaches, insider trading, and others that have hindered other cryptocurrency exchange platforms’ growth.
Don’t be afraid to talk about your product.
Not every company can organize a monthly product launch, but they can continue talking about their products. Apart from the “to gate or not to gate” dilemma, a major problem with traditional inbound marketing is that companies often produce relentless streams of top-of-the-funnel content that is hardly related to the product. You may need gated content to drive backlinks and improve your thought leadership, but it becomes a problem when your brand starts deviating from the content topics related to the product. Therefore, keep talking about your product lineups with your prospects and customers to ensure that the ideal customer profiles can understand how your products can help and benefit them.
Apart from these growth strategies, it is also essential to continue learning and experimenting. Growth has emerged because the industry is growing increasingly technical, evolving fast, and continuously demanding skill upgrades. There are always new growth opportunities; businesses that are first to test the possibilities and techniques can gain a substantial competitive advantage, leading to hypergrowth. Hence, the key is to stay curious, keep learning, experiment, and keep sharpening your technological edge on everything that can lead to growth.
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