Growth Strategies for Start-Ups
Read this chapter on the various growth strategies companies use. One particular area of interest for strategic managers is the best practices to build growth for new start-ups in the evolving marketplace. This video will teach how Hubspot CEO Brian Halligan addresses growth. He offers an analogy to showcase how much we as consumers invest in start-ups in our daily lives, such as using Spotify and Uber, which are all start-ups.
Definition and models
Definition and statistics
We start by defining what we mean by growth and growth-oriented firms. Criteria such as growth in the number of employees, or sales growth are generally used by researchers. The Kaufmann Center for Entrepreneurial Leadership, a leading institute of entrepreneurial research in the USA, for example, defines high-growth firms as being those with over 30 per cent growth in sales or over 20 per cent growth in the number of employees for each of the three preceding years. Other US researchers define strong growth as over 25 per cent growth per annum over a three-year period.
The number of high-growth firms is no doubt limited. Even in the USA, only 5 per cent of firms each year are estimated to take on extra staff. However, these fast-growing firms have a disproportionate significance for the increase in the number of jobs. In the USA, for example, it is estimated that only 12-15 per cent of all businesses are responsible for 100 per cent of the employment growth in the US economy. Research studies in Germany have also shown that businesses with 50 to 250 employees recorded the greatest increase in employment. International comparative data can be found in the Global Entrepreneurship Monitor (GEM). Based on a survey of all start-ups from 1999, the GEM presented the share of high-growth start-ups.
