McKinsey & Company has published a great article entitled “Grow fast or die slow” based on their own research looking at the success, or failure, of many software companies over the years. As the title suggests, their basic premise is that, as a software company, growth trumps everything else in terms of importance to long-term survival.
McKinsey defines multiple phases of growth and looked at the impact of revenue growth rates on a companies’ prospects for breaking through $100 million, $1 billion and $4 billion revenue thresholds.
McKinsey also drew conclusions about the key enablers of growth at various phases. Importantly, they identified a company’s monetization model as essential to phase one growth. McKinsey stated that it’s important to “define a monetization model that enables the company to capture demand without stifling it and thus to scale up successfully.”
This is a great read for anyone working in a software-based business.
