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E215: The Truth About Hockey Stick Level Growth in SaaS Businesses

In this episode, Sean debunks the myth of the hockey stick level growth trajectory in SaaS businesses. While often glamorized, achieving exponential growth is not necessary for success. Sean explains that this type of growth is more common in consumer-based applications and is driven by factors like virality and strong referral networks. He emphasizes the advantages of slower, more stable growth in the B2B world, especially for high-touch and complex software products. Ultimately, Sean encourages listeners to focus on building profitable, sustainable businesses rather than chasing the elusive hockey stick trajectory.

Key Points

  • Hockey stick growth is commonly talked about in the SaaS world, especially in the VC-backed space.
  • It is not necessary to achieve hockey stick level growth to be successful in the SaaS industry.
  • Consumer-based software applications are more likely to experience exponential growth due to virality and referrals.
  • B2B businesses tend to grow at a slower pace but benefit from stability and longer-term plans.
  • Rapid growth can lead to failure just as quickly, so slower growth can be advantageous for business stability.
  • Profitability, growth, and helping customers are better measures of success than the hockey stick trajectory.
  • Conversations with VCs and the need for funding may not be relevant for those pursuing bootstrapped businesses.