Four ingredients of hypergrowth

Now available to every startup

Hockey-curve hypergrowth is something traditionally associated with mega VC rounds and blitz-hiring sprees. But we are now seeing super-lean AI startups growing fast without YOLO-rounds or hiring waves.

Which means two things:

1. Mega VC rounds and hiring waves follow hypergrowth, they do not cause it. It is not clear if this was always true, but it is certainly true now.

2. Hypergrowth is available to everyone.

So, obviously, I’ve been thinking a lot about the ingredients of hypergrowth. How do we design and operate a company so that it grows fast without needing to hire tons of employees or raise a boatload of money?

Ingredient 1: Intense Demand

Demand is the foundation for everything. It is, essentially, to what extent does the market pull, and why?

We find demand out there - it is not something we control. We design our business around demand.

Look at Lovable and Bolt as examples of intense demand:

• Millions of people are designing websites and web UIs every day

• These people are trying to find the easiest and fastest ways to do this, and don’t believe current options are good enough

This looks exactly like my demand visualization from last week:

Using Lovable/Bolt’s intense demand as our guide, we can come up with three loose parameters for demand intensity:

1. Priority: How frequently is this project/workflow (designing websites / web UIs) buyers’ #1 priority?

2. Change: To what extent buyers trying to change from their current option set?

3. Delta: What’s the magnitude of our supply’s improvement over the current option set, as perceived by buyers?

Bolt and Lovable both score extremely high on these “demand intensity” parameters. As such, the market PULLS hard. Without intense demand, hypergrowth is just manufactured by us PUSHING REALLY HARD. (And, as a result, is pretty hard to do bootstrapped, with a small team.)

The founder’s job is to find intense demand. This is usually done by selling and delivering something that’s not quite right, and unfolding towards what is right.

This is super hard to do, and it’s the most important thing to do. But it’s not enough.

Ingredient 2: The “Repeatable Unit”

Once we’ve found demand, the task is to figure out how to repeatedly serve demand.

I think of this as the “repeatable unit” - One customer we serve, one thing we sell them, one process to sell to them. In other words, our one repeatable case study.

This, in my head, looks like a factory: We have one assembly line that produces identical case studies through a standardized production process. At the end of the factory line, we have happy, retained customers.

Anything more than one process, one kind of customer, one product, and one case study leads to exploding complexity in every single part of our business. The startups that grow super-fast are only able to do so when they standardize who they’re selling to and what they’re delivering — focused, of course, on who has the most intense demand.

At $10M+ ARR, we can add complexity with new product lines and market segments. Until then, it’s hard enough to make even the simplest factory work consistently.

Ingredient 3: Scalable Pipeline

If we keep going with the factory metaphor, scalable pipeline is the inflow to the factory. How do we find ONE scalable (and cost-effective) way to bring potential customers into our sales process?

In basically every startup I’ve seen grow super-fast, pipeline is a combination of two things:

1. One primary “motion” we control (e.g., outbound, events, content)

2. And crazy word-of-mouth + referrals (driven by a great experience, elegant supply, “wow” factor, etc.)

Ingredient 4: Compression

When we start out, we do slow, clunky founder-led sales and onboarding. In other words, our factory is highly inefficient with a lot of waste.

We do this to unfold towards intense demand and get our supply and factory line “right.”

As we do this, our job is to cut out waste and compress the process from pre-sale to “hell yes” post-sale, while making the process faster and more effective. That looks like this:

For a vivid example of how compression works, look at how the Formula 1 pit stop has evolved from 1950 to today. (Fun video on this here.) What once took a few minutes (and a cigarette break) has evolved into a 2-second changeover.

How does this work in startups?

• We can make parts, if not all, of our sales process async.

• We can make parts, if not all, of our onboarding self-serve.

• We can eliminate unnecessary steps, screens, forms, etc.

• We can bring the product experience *to the front* - e.g., just have them start using it on our homepage.

You can see all of these things in action on Bolt and Lovable’s websites. You just… start using the product at the top of the home screen.

How do you compress? With just one question: “How do we improve our next customer’s journey by 50%?” Map out the current process, see where there’s opportunity, make a change, repeat the exercise.

Most companies don’t seem to do this - they view the job as “complete” when the founder successfully transitions the buyer’s journey to sales & CS teams. Execs make small optimizations to the process, like refining their deal stage steps. And they just assume they have a 3-month sales cycle with a 20% close rate from SQL, and that’s that.

I do think compression is the founder’s job. For better or worse, only you can see the entire customer journey and know how to pull different levers (e.g., pulling the product forward in the sales process). By seeing the whole field, you can find elegant compression approaches that allow you to scale with fewer and fewer additional people.

No, this won’t necessarily mean you’ll go full self-serve PLG — this depends on your customer, demand, and product. But it means you’ll make compounding improvements in your buyer’s journey, usually grow more efficiently, and often make smart improvements to your product too.

So those are the 4 ingredients to hypergrowth. Does anything else matter?

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PS:

• Will be back from paternity in a few weeks, then announcing official dates for the next bootcamp… and a broader rebrand. Fun!

• Check out the new Waffle - your AWS devops copilot! Waffle makes building on AWS *simple* w/ 1-click infra templates, SOC 2 compliance built-in, and easy infra management.