How Businesses Achieve Hypergrowth
Guest Post by Rola Elkhatib
Hypergrowth is a stage that some businesses reach when facing extreme expansion. With a compound annual growth rate of 40%, the high percentage typically comes from market demand. Although all of this sounds too good to be true, there are drawbacks when the growth isn’t handled correctly. The team at CleverTap took a deep dive into hypergrowth and provided steps on how to successfully get to that level.
Step One: An Innovative, Game-Changing Idea
The key to innovation is coming up with a service or product that hasn’t been done before. However, an important factor to consider is not just the originality, but the need for the product as well. Creativity and demand are ways that companies like Slack faced hypergrowth and came out successful in the long term. Slack’s software provided a much-needed platform for employees to communicate with each other while proving more efficient than emailing back and forth. Slack changed the way employees interacted with each other and increased communication productivity. Because of this, Slack’s revenue grew to four billion dollars in four years.
Step Two: Take Consumer Feedback Into Consideration
Continuously tracking consumer feedback will help you dig deeper into what people in that market are looking for. The app metrics suggested by CleverTap will help you understand your customers background, including average revenue per user. For more information on marketing to specific customers, finding the customer acquisition cost gives you the exact dollar amount it takes to target a single customer. A better, full understanding of the people you are trying to reach brings you closer to hypergrowth. For a full list of app metrics, the image below provides more helpful examples.
Step Three: Plan For Growth
Normal companies typically plan for less than 20% annual compound growth. With hypergrowth, the overwhelming rate of 40% expansion can cause companies to fail because they aren’t properly prepared. For example, Uber has experienced rapid growth over a short period of time. They needed more drivers to meet the demand of the app users. Because of this, Uber created an online portal to speed up the application process for drivers. Before the online process, the drivers had to go in person to sign documents and pass tests, which worked when they were significantly smaller. As their user numbers were increasing, they planned accordingly and in a fast manner. This plan allowed for them to overcome the growing pains of hypergrowth and continue their successful company.
Step Four: Create a Great Environment For Employees
Cultivating a good company culture is key to keeping your employees happy. Practices like developing a mission statement, creating a collaborative work environment, and stating clear objectives will lead to employee dedication and commitment to the company. Some stats to consider:
60% of employees say a sense of purpose is their top priority when it comes to job satisfaction.
Employees that are engaged are 59% less likely to search for a new job.
Productivity of the entire company goes up 21% when CEO’s work to cultivate an engaged workforce.
A successful company culture is the driving force behind innovation.
With a low turnover rate and an engaged workforce, you won't have to spend as much time and energy in the recruitment process for new employees. The time saved can be spent on developing a plan for your businesses’ growth instead.
Companies like Slack, Airbnb, and Uber have all faced hypergrowth and came out on top. What they had in common was meticulous planning, innovation, and intensive research. When starting a new business, consider the steps above in order to not only expand your business, but to keep up with the perils of extreme growth as well.