What Is Hockey Stick Growth?
Hockey stick growth is a term used to describe rapid and exponential increase in a business’ revenue or user base within a relatively short period of time. The name “hockey stick” is derived from the shape of the growth curve, which resembles a hockey stick – a gradual beginning followed by a sudden and steep upward trajectory.
What Are The Different Stages Of Hockey Stick Growth?
Hockey stick growth typically involves three distinct stages:
- Initial Growth: In this phase, the business experiences modest and gradual growth. The efforts put into product development, marketing, and user acquisition start showing initial results, but the growth rate is relatively slow.
- Accelerated Growth: This is the stage where the magic happens. Businesses witness a sudden surge in growth that often outpaces their earlier progress. Factors such as increased visibility, word-of-mouth referrals, and optimisation of marketing strategies contribute to this rapid acceleration.
- Sustainable Growth: After the sharp spike in growth, the curve stabilises into a sustainable trajectory. While the rate of growth may slow down compared to the acceleration phase, the business achieves a significantly higher position in terms of revenue, user base, or market share by then.
How Long Does Hockey Stick Growth Last?
The duration of hockey stick growth varies from business to business and depends on numerous factors, including the industry, market conditions, and the nature of the product or service. Some businesses experience a short-lived hockey stick growth that lasts only a few months, while others sustain it for several years. It’s essential to capitalise on this growth phase to establish a strong foundation for the future.
What Are The Advantages And Disadvantages Of Hockey Stick Growth?
Advantages:
- Rapid Scaling: Achieve substantial growth in a short time.
- Market Dominance: Gain a competitive edge by quickly capturing a significant market share.
- Investor Attraction: High growth often attracts investors and funding opportunities.
- Brand Recognition: Rapid growth can boost brand visibility and recognition.
- Positive Feedback Loop: Success during this phase can lead to more positive reviews and referrals.
Disadvantages:
- Resource Strain: Rapid growth can strain resources, leading to scalability challenges.
- Quality Compromises: Focusing on growth might compromise the quality of products or service.
- Customer Satisfaction: Handling the customer surge can lead to potential service disruptions.
- Market Saturation: Growth might slow down as the market becomes saturated or competition intensifies.
- Financial Risk: Rapid expansion may require increased investment, posing financial risks.
What Are The Examples Of Hockey Stick Growth In India?
- OYO: Hospitality unicorn OYO experienced hockey stick growth by rapidly expanding its hotel network and services. Its strategic partnerships and user-friendly platform helped it gain massive popularity, leading to significant revenue and valuation growth within a short period.
- Swiggy: Foodtech startup Swiggy witnessed a sharp rise in its user base and order volume during its initial years. By offering timely deliveries and a wide range of restaurants, Swiggy tapped into the growing demand for convenient food delivery services.
- BYJU’S: Edtech startup BYJU’S saw a surge in user adoption due to its interactive and personalised learning approach. As the demand for online education increased, the startup’s user base expanded rapidly, making it one of India’s most-valued edtech startups.
- Zomato: Zomato, the restaurant discovery and food delivery platform, experienced rapid growth by catering to the evolving dining habits of consumers. By providing comprehensive restaurant information and easy ordering options, Zomato’s user base and revenue soared.
- Paytm: Paytm capitalised on the growing trend of digital transactions in India, especially after demonetisation in 2016, with its user-friendly interface and cashback offers. The fintech giant saw substantial growth in its user base and transaction volume in a short period.
