Escape Velocity for Startups

Hockey stick growth curves are a desirable path for startups. The idea is that growth is slow and steady, much like the base of a hockey stick, and then at some point it really starts to take off, much like the long part of a hockey stick. There’s another concept, escape velocity, that isn’t talked about as much but is still important.

According to Wikipedia, escape velocity is the speed at which the kinetic energy plus the gravitational potential energy of an object is zero. You can think of it as the point where something breaks free from whatever is holding it back, and thus  carries on indefinitely. For startups, escape velocity has to do with becoming the dominant vendor and growing indefinitely. All too often, a startup goes through the hockey stick growth path, only the fast growth eventually plateaus and the startup has slow or no growth. The startup didn’t fully achieve escape velocity.

A company like Salesforce.com that’s still growing at double digit rates, even with billions of dollars of recurring revenue, achieved escape velocity and shows no signs of slowing down. Few startups achieve the hockey stick growth curve and even fewer achieve escape velocity. Pay attention to the growth paths of other startups and ask yourself if it achieved escape velocity.

What else? What are your thoughts on escape velocity?

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