EXPONENTIAL GROWTH.

J-CURVE

Accelerate your business with these expert tips on "Exponential Growth. Analyse and discover this TIP!

Exponential growth of your company

Examples illustrating the concept of the J-Curve or exponential growth in different business and technology sectors:

• FACEBOOK (+) Y SOCIAL NETWORKS (+):

When Facebook started in 2004, it had fairly linear growth, mostly focused on universities and colleges. But once it opened its platform to developers and went global, its growth skyrocketed exponentially. The key here was to understand what mechanisms (such as virality through friendship and connections) would trigger this kind of growth.

• TESLA AND THE ELECTRIC CAR INDUSTRY:

Tesla faced numerous challenges in its early days, including near bankruptcy. However, after finding the appropriate business model (+) and technology, Tesla has grown exponentially, both in sales and market value.

• AMAZON WEB SERVICES (AWS):

Amazon started as an online bookstore, but when it began offering cloud storage services and other enterprise solutions, its growth was exponential. AWS is now one of Amazon's most profitable segments, and its growth continues to be strong.

• BITCOIN AND CRYPTOCURRENCIES:

The value and adoption of Bitcoin and other cryptocurrencies has grown exponentially in recent years. Although it is a highly volatile market, the concept of blockchain (+) and cryptocurrency have shown a clear example of exponential growth.

• STREAMING PLATFORMS SUCH AS NETFLIX:

Netflix evolved from a mail-order DVD rental service to a streaming platform and eventually to a producer of original content. Once it mastered the subscription form (+) and international expansion, growth was clearly exponential.

• MOORE'S LAW IN COMPUTING:

As you mentioned, Moore's Law of growing transistor density in microprocessors has been shown to be surprisingly accurate, driving the technology industry towards exponential growth in processing power, while production costs continue to fall.

• MOBILE APPLICATIONS SUCH AS TIKTOK (+):

TikTok is another good example that grew slowly in its early days but exploded in popularity due to its recommendation algorithm and the network effect of its users, becoming one of the most downloaded applications in a short period of time.

All of these examples had periods of slow growth at the beginning (the flat part of the "J"), but once they found the right "trigger" (be it technological, market or financial), they experienced exponential growth. This is the kind of track record that investors often look for when considering startups and other high-risk/high-reward investments.

Achieving exponential growth is no easy task, but there are some strategies and best practices that can increase your chances..

HERE ARE SOME TIPS THAT MIGHT BE USEFUL:

• CUSTOMER FOCUS (+):

Understand your customers' needs and offer a solution that actually solves a problem or satisfies a need. A product that customers love will be much easier to scale.

• SCALABLE BUSINESS MODEL (+):

Choose a business model that allows for easy and rapid growth without a linear increase in operating costs.

• CONTINUOUS INNOVATION:

Innovation is not only about the product, but also about business processes, supply chain and market strategy. Maintain a culture of innovation in the company.

• NETWORK EFFECT:

Try to build a network effect around your product or service where each new user who adopts it adds value to those who have already adopted it.

• VIRAL MARKETING:

A good product sells itself. Use social media and other digital channels to create a marketing strategy that makes customers want to share your product with others.

• STRATEGIC ALLIANCES:

Consider partnering with other companies or brands that can offer complementary capabilities and assist in rapid market expansion.

• METRICS CONTROL (+):

Set KPIs (Key Performance Indicators) that really matter and monitor these indicators religiously. Exponential growth needs to be carefully measured and monitored.

• ADJUSTS AND ADAPTS:

Be prepared to pivot. Not all first ideas will be successful. Being willing to adapt and change strategy quickly is key.

• ADEQUATE FUNDING:

Make sure you have the necessary capital to support rapid growth. This may involve rounds of financing or strategic agreements with partners.

• CORRECT EQUIPMENT (+):

A good team can make or break a startup. Make sure you have people who share the vision and can bring complementary skills to the team.

• MAINTAIN THE CORPORATE CULTURE:

As you grow, make sure that the company's culture and values are maintained. A strong culture can be a powerful engine for growth.

• LEARN FROM MISTAKES:

Every failure is an opportunity to learn. Don't see setbacks as a negative; instead, use them to improve and adapt.

Achieving exponential growth involves risks and challenges, but with the right approach and effective execution, the rewards can be enormous.

This concept is applied in many sectors but in this TIP we are going to focus on its application to business creation and how you should use this concept of the exponential growth curve or exponential growth curve. J-curveThe main focus is on the search for funding from investors.

1. Constant sales: If we take the company's sales to a matrix or graph that allows us to check its evolution over time, we will see that if sales are repeated period after period, the line will be horizontal.  For example: every month I always sell the same thing, the same quantity
2. Increasing sales, constant speed: if we record constant growth, growth will be linear. For example: When I sell insurance, the customer pays me a premium and each month I acquire "x" number of customers who enter my portfolio. 
3. Exponential sales, acceleration: If I grow more and more every day, if my sales growth accelerates, I will have exponential sales growth, and my sales graph will be like a J-shaped top-down. This is what an investor wants to see to decide to put money into your startup!

During the first months of your company's life, while you validate your business model and get your first customers, your sales curve will be flat. But as soon as you have discovered the right sales channel, your sales curve will be flat, your sales will grow exponentially: J-curve. It is only necessary to obtain the necessary financial resources to trigger the process. And it is precisely this that you must show investors by demonstrating that you have found the mechanisms (the gunpowder) that will trigger your sales.  

The J-curve or exponential growth curve applied to the technological world

Gordon Earl Moore, co-founder of Intel, predicted 50 years ago that the power of microtransistors in microprocessors would double every 24 months, increasing their speed. This statement constitutes the model known as Moore's Law.  

The prediction could not have been more accurate: Moore's law has been fully realised. The technology sector has followed this exponential growth curve to this day, both in its speed of diffusion and in its technical improvements and reduction of production costs.

Nanotechnology, virtual reality (VR), data science, artificial intelligence (AI), robotics and blockchain, among others, have followed the same path. The speed of Internet connections continues to grow both at home and on mobile devices. And we must remember that we are in the vicinity of the 5G connection. ¡¡A mobile phone contains far more technology than was used to send the first rocket to the moon!