"The Elephant in the Room: The Myth of Exponential Hypergrowth and the Power of Inclusive Design"

"The Elephant in the Room: The Myth of Exponential Hypergrowth and the Power of Inclusive Design"

Introduction:

In today's fast-paced business environment, the pursuit of exponential hypergrowth has become a common goal for many high-growth companies. However, a closer examination reveals that the notion of exponential growth is often misunderstood. This article aims to debunk the myth of exponential hypergrowth and shed light on the concept of growth decay. Additionally, we will explore the power of inclusive design and its potential to drive sustainable growth.

Understanding Growth Decay:

Contrary to popular belief, high-growth companies do not experience exponential growth. Instead, their growth follows a quadratic pattern known as growth decay or growth persistence. This natural law states that as a company scales, its growth rate as a percentage naturally declines. Even when there is nothing wrong with the company, growth cannot continue exponentially due to market saturation.

The Logistic Curve:

To better understand growth decay, we can turn to the logistic curve. Initially, when a product or company is far away from its natural limit, its growth may appear exponential. However, as it reaches around 25% market penetration, the curve flattens into linear growth. This shift occurs due to the tension between the exponential force of growth and the diminishing number of remaining untapped targets. Eventually, the curve levels out at the "carrying capacity," representing a fully-saturated market.

Expanding the Market:

To counter the limitations of market saturation, at-scale companies often invest billions of dollars in expanding the size of the market. By doing so, they create new growth opportunities beyond raising prices. This strategy acknowledges that growth cannot solely rely on the existing market and highlights the importance of exploring new markets or creating wholly new products.

The Elephant Curve:

When plotting growth as market share, the concept of the Elephant Curve emerges. This curve recognizes that the carrying capacity of the underlying market can be a moving target. In the early stages, companies should focus on winning market share in a specific space, creating the first Elephant Curve. However, as the product matures, a more drastic approach is required, such as introducing new products or significant updates to address new markets.

The Power of Inclusive Design:

While marketing-driven growth has its merits, inclusive design offers a more effective and cost-efficient alternative. Inclusive design emphasizes building word-of-mouth-driven growth directly into the product, rather than relying solely on the marketing team. This approach not only reduces customer acquisition costs but also enables organic growth as the company expands.

Conclusion:

The myth of exponential hypergrowth has been debunked, revealing the reality of growth decay and the limitations of market saturation. Companies must recognize the importance of expanding the market and exploring new growth opportunities. Additionally, incorporating inclusive design principles into product development can drive sustainable growth and foster word-of-mouth-driven expansion. To maximize growth potential, businesses should consider the following actionable advice:

• 1. Embrace market expansion: Invest in strategies to increase the size of the market, allowing for continued growth beyond market saturation.

• 2. Continuously innovate: Recognize the need for new products or significant updates that address evolving markets and consumer demands.

• 3. Prioritize inclusive design: Build word-of-mouth-driven growth directly into the product, reducing customer acquisition costs and fostering organic expansion.

By understanding the realities of growth decay and harnessing the power of inclusive design, companies can navigate the complexities of the modern business landscape and achieve sustainable growth. As John Wanamaker famously said, "Half my advertising is wasted. I just don't know which half." By prioritizing inclusive design, businesses can move away from wasted advertising and towards a more effective and efficient growth strategy.