It can seem counterintuitive, but it is possible for a business to grow too quickly. Of course, if you're running a rapidly scaling software company, you're probably aware of the phenomenon.
You launch a product and get a few customers on board. Everything is running smoothly until the stars align and you suddenly have a huge influx of customers, all with slightly different demands, that you need to support and retain. All of a sudden, the business is scrambling to meet customer expectations, develop the product in light of these demands and hire enough staff to make it all work. Too much growth can create chaos, and suddenly the costs of rapid scaling are creating a potential problem.
We explore this issue in our video, "How Much Growth is the Right Amount of Growth?" Watch the video to hear Ryan Hinkle, a Managing Partner at Insight, talk about finding the right amount of growth for your business.
Ryan highlights that the question of identifying the right amount of growth is not only common, it is also commonly debated. Different business leaders and investors will have different priorities. But for investors, the priority is usually finding the right balance between growth and profit potential. The Rule of 40 is commonly used as a measuring stick to figure this out. Ryan digs into this rule of thumb and other key issues you should consider when assessing the right amount of growth. Check it out to learn more.