Google The Hockey Stick Growth Club: Real Thing or Just Fake News

The Hockey Stick Growth Club: Real Thing or Just Fake News

So, you’ve just launched your startup.

And even though you know that things are meant to be tough you’re determined to…

… yep, join the hockey stick growth club!

You know what I am talking about.

THAT hockey stick moment (aka inflection point) where a startup suddenly sees a dramatic surge in its sales/growth.

Common, don’t be shy – I know you want it!

But how that happens I hear you ask?

Startups Either Take Off or Don’t

Well, as Paul Graham puts it:

A lot of would-be founders believe that startups either take off or don’t. You build something, make it available, and if you’ve made a better mousetrap, people beat a path to your door as promised. Or they don’t, in which case the market must not exist.”

So yes my friends, to answer my/your earlier question (about how it happens)…

… in many aspiring startuppers’ opinion, the hockey stick effect is simply a by-product of creating something great “take-off-able” and then letting ‘viral marketing do its thing”.

You know – the Dollar Shave Club style!

The moral of the story?

If you’ve been in the market for quite some time and haven’t yet experience THAT ‘take-off moment’, is it maybe time to…

… throw the towel (or pivot if you will) and move on into something else that looks more promising.

Or maybe NOT?

The ‘Hockey Stick Growth Fairy-Tale

You did read that correctly.

Fairy-tale!

Even though hype-driven sites such as TechCrunch love to glamorise startups and hypocritically promote the ‘fast and furious startup’ notion…

… in reality that’s FAKE NEWS.

Yep, I said the F-word!

As Chris Dixon rightly puts it:

We tend to hear about startups when they are successful but not when they are struggling. This creates a systematically distorted perception that companies succeed overnight. Almost always, when you learn the backstory, you find that behind every “overnight success” is a story of entrepreneurs toiling away for years, with very few people except themselves… supporting them.

The end result?

The train people to believe in magic.

You know – instant wins, unexpected take-offs, and hockey stick growth.

And yes these unrealistic expectations typically result in people prematurely giving up.

The cold hard truth?

That’s not how things work…

The Four Stages of Hockey Stick Growth

Yes my friends.

According to Bobby Martin, author of The Hockey Stick Principles, the hockey stick moment doesn’t happen instantaneously but in 4 stages:

Phase #1: Tinkering Stage (aka the idea phase)

Phase #2: The Blade Years (aka the ‘low years’ phase)

Phase #3: The Growth-Inflection Point (aka the ‘take off’ phase)

Phase #4: Surging Growth (aka the nuclear phase)

And with ‘hockey stick terminology’ stuff out of the way let’s jump into Ben Silbermann story that exemplifies this journey.

Who is Ben Silbermann?

No other than Pinterest’s CEO.

And what he has to say about the business growth hockey stick phenomenon?

A couple of years ago, he was bold enough to say that they had “catastrophically small numbers” in their first year after launch, and that if he had listened to popular startup advice, he probably would have quit.

Yep…

Which is line with what many other founders admission that beating the odds and experiencing the hockey stick effect (and the ‘meteoric growth’ that comes along with it) didn’t happen painlessly.

So, what I am trying to say?

While hockey stick growth is a real thing (but it happens to just a tiny fraction of startups out there) with a few exceptions it does NOT happen because of ‘take-off-able products’ but…

… rather as a result of some founders’ relentless effort (for years) to figure things out and turn their grant vision into reality.

So, with all that said what’s the antidote to magical thinking?

Apart from stop believing in fairy-tales and getting real…

… is this:

Pain math!

What’s that?

Well, according to Aaron Schildkrout, the person that coined this term, pain math is the antidote to magical thinking!

Yep, magical thinking – just like the unexpected overnight hockey stick growth surge in sales we have spoken earlier.

So, what’s Aaron recipe?

In a nutshell, he suggests that as soon as we are fairly confident that our product works as intended…

… we have to set some tangible growth goals and then work our way backwards, the spreadsheet way!

Is what many call quant-based marketing.

If, for example, the goal is hitting $50k in the first year, we need to actually break down the numbers needed (for every stage in the funnel) for hitting that goal.

Ad spend?

Click-through-rate?

Web visitors #s?

Email opt-ins?

Prospects converted?

You get the drill…

Of course, understandably when you’re just in the beginning, you get most of these numbers totally wrong but that’s ok.

The point here, is not to learn to screw with spreadsheets, as most venture-backed startups have mastered, but rather to help you:

a) hold yourself accountable to your goals,

b) kill hope-marketing

b) identify which pieces of your funnel work and which doesn’t, and (eventually)

c) get real with your estimations

So, what do you think?

Time to ditch magical thinking and start moving the needle?

Glad to hear that!

And now it’s time to wrap things up with today’s key takeaways.

Today’s Key Takeaways

– Startups do NOT either take off or don’t

– Instant wins, unexpected take-offs, and hockey stick growth happen once in a blue moon

– Unlike Cinderella, just hoping is NOT a plan

***

Ok, “guys” that’s all from me for today!

If you enjoyed today’s post, check out my kinde book, The Vertical Startup: A practical guide on how today’s bootstrapped entrepreneurs turn a late market entry into an advantage by going vertical, that is currently available at Amazon.

I hope to see you soon.

Best,

Andreas

“You will not be a big hit right away. You will not get rich quick. You are not so special that everyone else will instantly pay attention. No one cares about you. At least not yet. Get used to it.”

– David Heinemeier Hansson, ‎Jason Fried

Categories: Hockey Stick Growth

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