Hockey Stick Growth in the Philippines: What it means for Startups

In the first ten years of operation, about 96% of new firms fall short, according to Statista. A number of firms, namely Facebook and Amazon, reported a sharp increase in their parameters, resembling a hockey stick. Disruption is happening more slowly these days among Philippine startups. However, due to investor preference, all startups—especially those vying for venture and angel capital—are trained to present this growth curve. Interestingly, the hockey stick growth for Philippine startups is becoming a more essential parameter for its growth. Let’s see what it means for startups and businesses.

What is a Hockey Stick Growth in the Philippines?

The growth pattern known as “hockey stick growth” is one in which a corporation grows steadily at first but then exponentially expands until a particular point (or “point of inflection”) is reached. It is well known that startups cause market disruptions and that this disruption creates entirely new demand for their products. When such demand and additional measures of an innovative startup are plotted as a graph, they have the appearance of a hockey stick.

Stages of a Hockey Stick Growth

Every startup that launches hopes to grow like a hockey stick. When charting the revenue growth of the companies, four primary stages of growth are noted. Here are the following phases of hockey stick growth for Philippine businesses…

  • Tinkering
  • The Blade Years
  • Growth Inflection Point
  • Surging Growth
Tinkering

At the beginning of this phase, the entrepreneurs thoroughly examine and assess their startup ideas. During this phase, they investigate the business idea’s viability and look for a problem-solution fit. When business owners are totally committed to bringing their ideas to fruition, tinkering comes to an end.

Blade Years

This stage often lasts three to four years, and very little money is made. Bootstrapping is typically used by business owners to cover their costs.

Growth Inflection Point

At this juncture, the company structure has reached its pinnacle of perfection. This is the moment when the revenue of the startup grows exponentially. Entrepreneurs can use their growth momentum at this point to draw in financiers and other backers.

Surging Growth

Entrepreneurs must deal with the challenges of managing and directing their company in the face of a rapidly expanding market at this time. Several big companies offer various highly enticing proposals to purchase the business at this point.

How long does Hockey Stick Growth last for Philippine startups?

The length of hockey stick growth for Philippine startups differs for each company and is contingent upon a number of variables, such as the sector, state of the economy, and type of service or item offered. Some firms expand like a hockey stick over a few months, whereas others continue to grow like that for several years. Making the most of this growing stage is crucial to laying a solid basis for what lies ahead.

Advantages and Disadvantages of Hockey Stick Growth for Philippine Startups

Advantages
  • Brand Awareness: Accelerated expansion can increase a brand’s awareness and familiarity.
  • Attraction of Investors: Strong growth frequently draws investment possibilities and shareholders.
  • Dominance of the Market: Get a competitive advantage by seizing a sizable portion of the market early on.
  • Rapid Scaling: Attain considerable expansion within a short period.
Disadvantages
  • Customer Satisfaction: Managing the influx of customers may cause service interruptions.
  • Financial Risk: There could be financial concerns associated with rapid expansion if further funding is needed.
  • Saturation of the Market: As the industry gets crowded or competitiveness heats up, development could dip considerably.
  • Quality Compromises: Prioritizing expansion over quality control could result in subpar goods or services.

Impact of Hockey Stick Growth on Philippine Startups

When a business experiences a hockey stick growth, the bulk of its revenues happens to occur in the final weeks, months, quarters, or years of the period. A number of disadvantages are caused by an imbalance in revenue growth for a company…

Discounts

Customers taking benefit of substantial discounts might lead to a rapid boost in sales when concessions and specific conditions are offered. Sales employees may experience stress as a result as they strive to keep all of their commitments and stop any losses from happening. The reductions and special terms will result in a direct loss of earnings if sales continue to decline.

Product Delivery

The customer support and delivery staff may experience stress when a high volume of orders are placed by customers at the conclusion of a sales period. The company’s resources might be fully utilized if it has been operating below its typical thresholds and then sees an increase in revenues near the conclusion of the term.

Product Returns and Refunds

Disgruntled consumers might easily result from an overabundance of purchases and a cramped sales crew. Consumers will return merchandise and request a full reimbursement or replacement if they receive incorrect or subpar goods.

Solutions to the Hockey Stick Growth for Philippine Startups

Adjusting the Sales Procedure

To improve the accuracy of sales projections, the organization might streamline the sales process. To do this, assign the sales teams the task of creating projections based on more trustworthy criteria, such as the average sales cycle time, closure ratios, value of existing sales cycles, and current leads. 

After that, the forecasts ought to be distributed to the relevant levels of leadership so they can compile the data into an in-depth report. It is more trustworthy to get sales predictions from sales representatives to senior management rather than allowing executives to create forecasts and distribute them to the sales teams.

Sales Analytics

To track incoming sales from the start of the sales season to the finish, sales representatives ought to rely on tried-and-true sales analytics. The sales staff is capable of determining the reasons behind any lapses or abrupt modifications in the procedures and implementing remedial measures. When the end of the sales period draws near, the business shouldn’t use odd deals and limitations that lower earnings.

Customer Relationship Management

It makes it possible for managers or sales reps to locate any barriers that can interfere with the marketing procedure and take quick corrective action. Additionally, they can keep an eye on the procedure for selling to spot any steps that are lasting longer than expected, discover the reasons, and quickly resolve them.

Because of the more effective involvement of startups, many traditional companies are shifting to online platforms, while reputable companies are experiencing a fall in sales. Recently, growing companies have been able to supply goods that many existing stores are unable to do because surrounding firms are unable to digitize. Because of this, it’s critical to comprehend the causes of this development tendency if an emerging company is to survive and succeed in the long run.

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