Focusing on the Simple, Adaptable and Scalable
The right business model for hypergrowth can arise at different enterprise lifecycles. Some companies discover a suitable hypergrowth business model after a long period of development and client acquisition, while others use a unique business model as an impetus for start-up. As this differs from one hypergrowth company to the next, the common thread of simplicity in the business model is the main requirement to support scaling.
While some hypergrowth business models are examples of ingenuity, they do not always need to be extremely creative. The key issue is that they can be continuously developed from one growth phase to another so that the business does not stall. Platforms are a recent and highly visible example of simple, adaptable and scalable business models. Matched with appropriate pricing models, they are able to effectively tune the pace of growth.
Many hypergrowth firms are able to incorporate impactful data-driven scaling decisions, especially when technology plays a key role in their business model. Keeping the business model sufficiently simple is a priority; increased complexities in the business model can compromise its adaptability and scalability. In addition to maintaining focus on one business model, hypergrowth companies can operate with multiple business models, but this happens primarily through transition from one growth cycle to the next.
Progress is tracked with clear understandable metrics. Hypergrowth companies employ them with only a few bellwether KPIs.
Business Model, solution examples
Key Growth challenge
2.1 A balanced platform
Matching demand and supply vectors that are uneven in different growth markets, when the business model is based on connecting the two markets
Use data to drive decision-making and maintain the business model for continuous growth
Hypergrowth Company, MENA, CEO
“Our business model is built around connecting two markets by our platform. Growth vectors are different on supply and demand side. The key is to balance these factors. Too much offering through the platform without sufficient demand kills supply in the long term and vice versa. This is very difficult through time as the other side of our business is always based on local clients and we need to build the business with the right balance every time, in each market we expand to. I am proud of our accomplishments, as we have been successful in doing this for more than 10 years. Main solution has been our capability to utilize data to support our business model.”
2.2 A forced transformation took us to hypergrowth
Declining demand due to changes with clients’ investment patterns from CAPEX to OPEX
Transform the business model and use the model for versatile growth
Information Technology, Africa, CEO
“I was running a successful business in Africa through the telecom boom, expanding and scaling the hardware and service business. Then, one of our choices did not work, as circumstances changed. We ended up stockpiling a lot of hardware and eventually our warehouse was full and I had no idea who would buy it. Clients had become more careful and wanted to move their spending from CAPEX to OPEX. Previously, the company sold the hardware and software separately. Now we were forced to combine our products into one solution and switched the model to SaaS. Then we started to apply the model to new uses: big clients, small clients – platforms to enable growth by serving multiple client segments. The struggle was a turning point. Now we operate in multiple industries and have had the opportunity to experience hypergrowth.”
2.3 Business model simplicity
Operating two business divisions which have different growth drivers
Switch to one simple business model that includes both divisions for balance to enable continuous growth
Service/Technology Business, Asia, CEO
“We have two different business divisions. The key solution for growth has been to keep the business model simple and suitable for both divisions. One division is slow-growth project business: very steady and growing demand but not really scaling fast. The other one is quite the opposite, a fast-scaling technology business. Our stakeholders expect us to be transparent and both of the businesses require a lot of working capital and external financing. We had two different business models in the divisions. We made a transition to one business model. Slow-scaling business does not require a scalable business model and the fast-scaling business is functioning very well with a traditional business model, as long as our offerings are the best available.”