Hockey Stick Growth and What it Means for a Business?

Last updated on November 5th, 2020

Some businesses experience exponential growth. This is common for startups that have weathered the storm and are ready to make a rapid profit after achieving a sizeable market share or popularity among its customers. The growth pattern for such a business appears like a hockey stick. This line chart has a lot to tell about the business’s growth and how it should plan things ahead. To learn all about hockey stick growth and what it means for a business, see the explanation below.

What is Hockey Stick Growth?

Hockey stick growth is rapid growth for a business after a period of quiescence. The line chart plotted for such a growth is like a hockey stick, which shows the initial period of stagnation, followed by the inflection point and a move towards rapid growth. The term is often associated with startups, since a hockey chart like growth can occur when a startup finally strikes a chord with its market niche and is able to benefit from favorable market conditions.

Different Stages of Hockey Stick Growth

There are different stages that a successful business goes through. During the start up period the business tinkers with ideas and strategies, until it is able to make things work. Just like an ice hockey stick, a hockey stick chart has a blade and a small curve, followed by a long shaft.

The Blade Years or the Stick

The years of low growth are depicted on the hockey stick chart along the y-axis and for some period of time, over x-axis. The blade years are the time of subdued growth, where a business is trying to find its feet in the market.

The Growth Inflection Point

The small curve on the chart is the inflection point, where something changes and the subdued growth is suddenly changed into a bend, which is the inflection point. The hockey stick growth curve, located at the toe of the blade.

Surging Growth or the Shaft

After the blade years and a curve, the growth is represented at a long and straight rise, with a steep angle. This is the rapid growth experienced by a business.

Example of Hockey Stick Slide Design using Free Hockey Stick Curve PowerPoint template

How Long Does Hockey Stick Growth Last?

Many businesses at their humble beginnings face little or low profits for the first two years. However, due to social media marketing and access to online marketplaces like Amazon and Alibaba, startups can now experience such a growth quicker than before. Once a surge is experienced, it is likely to level off at some point. If the business is able to remain successful in reaching out and satisfying its customers, such a growth becomes linear.

Example of Hockey Stick Slide Design using Free Hockey Stick Curve PowerPoint template

This is an important point to consider when analyzing a hockey stick growth chart. Sometimes, a short-term order or gains due to favorable market conditions can quickly drive temporary growth. Not understanding this pattern is likely to lead the business downhill. As short-term gains can often be misinterpreted as long-term growth prospects during an overzealous PowerPoint presentation.

Final Words

With online marketplaces, social media marketing and a culture of online shopping due to the COVID-19 pandemic, many startup businesses are likely to experience short-term growth. Many brick and mortar businesses are moving towards online platforms, as established brands are facing a decline in sales due to the more efficient presence of startups. Businesses that started just a few months back can deliver goods that many established outlets cannot, due to the inability of nearby businesses to digitize. A startup can now sell to millions using a platform like Amazon and its clones showing up in different countries to replicate its success locally. On the contrary, old retail shops which have failed to establish an online presence are finding it hard to survive.

The hockey stick growth experienced by many startups recently will either continue in a linear pattern in a post COVID-19 era or if people once more return to bricks and mortar businesses, many startups experiencing a hockey stick growth might find it hard to sustain their growth. This is why its important to understand the reasons behind such a growth pattern for long-term success and survival of a startup.

About Farshad

IT professional, communications specialist and Blogger!

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