cdixon blog

Growth curves of startups

Pick whatever metric you want for gauging the success of a particular startup: profits, revenues, pageviews, etc. A graph I’d love to see is those metrics, graphed over time, for a wide variety of startups. From my experience, you’d be surprised how often those graphs show sudden growth. Something happens in the world (an “exogenous shock”) and the startup suddenly takes off.

I remember first observing this when I worked at Bessemer. For example, there was a startup that supplied services to video websites. For years, the company soldiered along, barely growing. Then, suddenly, YouTube blew up and this company took off along with it.

As a founder, these exogenous shocks are out of your control, but you can 1) understand what exogenous shocks you depend on, 2) try to guess when those shocks will hit, 3) manage your runway so you survive long enough for them to hit.