In the past 20 years, there has been a constantly increasing distinction between the start of a business and the foundation of strong growth to start up.
The first had always included the second. Until recently.
At one point in the 2000s, the Startup with strong growth became its own animal, so to speak, with a preference for rapid and robust market growth, which required a mandate for even faster income growth, this which in turn constrained flawless dependence outside from outside outside outside outside outside outside outside outside outside the outside Outside outside outside outside outside outside outside outside outside outside outside outside outside still investment , generally a venture capital, at the early stages of the startup life cycle.
5 things to know about high growth
- Historically, it required investment in venture capital.
- This often requires several investment cycles to higher assessments.
- Strong growth milestones are more difficult to reach with shorter periods of time.
- High Tech has historically required a strong growth strategy.
- High growth has historically always required an emphasis on the unknown advantages of advanced technology.
However, in recent years, evidence is reviewing that this investment approach to a victory is no longer attractive, because money has become more expensive to put to work. The high growth approach has necessarily been transformed into a singular type of strategy which has less to do with sustainable sustainable and reproductive growth mechanisms and more to do with the return on investment at all costs.
Today, the strong growth process supported by the company is more like a means for its own end of investment. He has indexed too much on the destination to the detriment of the trip, so to speak, and he often sabotes and cannibalizes said trip, generally sacrificing the destination when the dollars necessary to extend the trip are exhausted.
It’s not great for the founders, and it gets worse. Investment to the company begins to look like a greater theory for many founders, and in a certain sense, it is. But I do not want to denigrate the venture capital or the foundations of the strong growth strategy.
I will tell you that we have reached a time when most of the most risky aspects of the strong growth strategy supported by a company are no longer necessary to reach these same purposes, as long as everyone is satisfied with numbers in millions instead of billion.
Many experienced founders I speak these days have decided to live with it. So let’s talk about a better approach to startup growth.
Slow and regular winning the race
Strategically, the strong growth strategy is exactly what it looks like.
Regular growth is more aligned with what we call small businesses. These companies, like all companies, always require an initial expenditure to start, but growth models and business plans target smaller, more manageable and achievable growth, which leads to smaller potential yields over more periods long for initial investors.
Today, a regular growth startup supported by VC is a complete oxymoron. You cannot take money from venture capital and develop slowly and stable. And that is also why very few startups initially contract on loans while most small businesses often do it.
In 2023 and 2024, strategies are starting to converge because most of the VC was funded, while inflation has reached harsh, and post-countryic tools and methods facilitate the start of a business without requiring a lot Many of these initial high growth starting costs, such as physical space or local hiring or costly fundamental technology.
As a 25 -year -old entrepreneur who was successful and failure with high -growth and regular growth companies, the lines between the two have always been vague. But in the general start -up universe, more and more founders are starting to ensure.
Milestones are the main difference
Strategies with high growth are also what I call investments to start the elevation-rining. To simplify, the main difference between high growth and regular growth is that milestones to reach a higher level of high growth are more distant and more difficult to achieve than they are with regular growth.
Thus, a startup needs more fuel to reach them than what can be available from income, for a longer period.
Some qualifications:
- A billion dollars’ goal can be achieved using one or the other strategy. Strong growth does not give you a better chance of achieving your billion dollars, just a shorter and risky calendar.
- Some commercial ideas require a large amount of start -up capital just to exist. Spiffy (Mobile Vehicle Care and Maintenance, My Ancoïd Job) is such an example, where vans and equipment and software development required a massive initial expenditure before the first vehicle could be maintained. These are exceptions that will almost always require VC investments.
Regular growth is the strategy of using the money you have on hand To reach your next milestone with room to operate at the new level while continuing the next new level.
A simple way to think about it is that the use of a regular growth strategy, it can take months to hire your next employee, while using a strong growth strategy and raising a seed lap allows you to do call for 10 people immediately.
However, in regular growth, this next employee has only to add enough income to bring you to the next employee, more a little more. In strong growth, these 10 initial employees must lead you to income that will prove an assessment that will allow a greater increase that will allow you to hire 20 additional people. Rinse and repeat.
Again, not to say that we are right or it is false, but they are indeed different and require different styles of execution.
Why the founders should consider regular growth
Five years ago recently, I would advise most startups to give a strong growth shot, but only if they see a clear path to their next level of growth, as well as a less clear path to a few levels After that, and follow a strong growth strategy, collect funds and go for what you think is the feasible company of a billion dollars is the best way to follow.
But as I said earlier, these lines have been considerable dramatically in the past five years. It has become a less decision as to the need for capital, and more How much capital is necessary and when.
Most startups do not need the latest generational wave of fundamental technology to go to a respectable level of success.
One of the things that my colleagues and I are talking about is the fact that with all this attention of investors in AI – the supposed Generational vagueness of technological progress – many commercial models and even commercial tools are neglected.
Most startups do not need the latest generational wave of fundamental technological advancement to go to a respectable level of success. There are many old technologies that are perfectly viable to adapt to profitability analyzes that are ignored at the moment because all the investment money in AI will build better chatbots and autonomous cars.
This means that with a new flashy AI that removes all the energy from oxygen and investors out of the room, many concepts, tools, tools and even commercial models can be obtained. Thus, a small business startup can use these high growth tools and methods to achieve a lot of the same results for much less costs – or much less required.
This changes my perspectives a bit. I would always say to wait until you are absolutely sure that you need the investment, but now I would say that you are not sitting on your hands either. Use the aspects of a strong growth strategy – software, automation, Digital marketing Tools, remote meetings, all this – to draw milestones that are more distant but do not need all this external investment to reach.
At this point, I think it is much easier to adopt this approach from a regular growth strategy point that it should not face all unwanted demands of a high growth strategy and ‘Investment in VC.