In the world of tech and startups, the word “growth” is often thrown around as a buzzword. Companies are obsessed with achieving exponential growth and becoming the next unicorn, and investors are constantly looking for the next big thing that will skyrocket in value.
While I think that this won’t ever completely go away, I do think companies and investors are being a little bit more pragmatic these days about the future. In 2023, growth will be more about sustainably increasing revenue rather than quick immediate growth without any long term plan. While the focus on growth can sometimes be overemphasized, it is still an essential factor in determining a company’s success.
First, it’s important to understand what we mean by “growth.” In business, growth can refer to a variety of things, such as revenue growth, user growth, market share growth, or even employee growth. Essentially, growth is any kind of expansion or improvement in a company’s performance or reach. It’s not just about getting bigger for the sake of it, but about achieving sustainable and meaningful progress. In Product Growth, it is important not only to grow by increasing users and subsequent revenue, but to grow predictably and incrementally.
"Growth is not a one-size-fits-all strategy, and different companies will have different inflection points where growth becomes a top priority." --- Casey Reid, Product Growth Lead
One of the biggest challenges for startups and other companies is knowing when to focus on growth. Growth is not a one-size-fits-all strategy, and different companies will have different inflection points where growth becomes a top priority. For some companies, growth may be a priority from day one, while for others, it may come later in their lifecycle. While you should be always tracking user behaviour for example, it often doesn’t make sense for 0–1 companies to favour solving data needs over getting a product shipped.
When it comes to startups, growth is particularly important because these companies are often operating in a highly competitive and fast-moving environment. They need to grow quickly to establish a foothold in the market, attract customers and investors, and fend off competitors. However, growth can also be risky because it requires significant investment and can lead to a “growth at all costs” mentality that prioritizes short-term gains over long-term sustainability.
One important inflection point where growth becomes critical is when a company has reached product-market fit. Product-market fit is the point at which a company’s product or service has found a strong and sustainable demand in the market. At this stage, the company needs to focus on scaling up to meet the demand and capture more market share. However, scaling too quickly can also lead to problems if the company is not prepared to handle the increased demand. Further, as we have seen in 2021 and 2022, businesses hire for an immediate need and then have to lay off huge portions of their staff in the downturn. Finding product-market fit is only part of the story, and often companies are on a time limit to increase users, increase their reach and demonstrate to themselves and potential investors that they have runway and illustrate their likelihood of taking off.
Ultimately, product growth is an essential part of any successful business strategy, but it must be approached with caution and careful planning. Companies need to understand their unique inflection points and develop a growth strategy that is tailored to their specific needs and goals. They must also be willing to make difficult decisions and prioritize long-term sustainability over short-term gains. While growth may be an overused word in the tech world, it remains a crucial factor in determining a company’s success. Putting impact behind growth means backing it up with data and demonstrating predictability and resiliency, not just about sprouting up without strong roots.