The No. 1 Mistake I've Seen Promising Startups Make Here's how to successfully achieve and navigate hypergrowth.

By Stu Sjouwerman

Opinions expressed by Entrepreneur contributors are their own.

Tom Werner | Getty Images

Hypergrowth. It's one of the most desired and anticipated phases of any company's existence. It's also the riskiest. Described by the World Economic Forum as being those businesses that have "astonished the global public with their ability to expand and scale at a pace that was previously unknown," companies that have successfully navigated the hypergrowth stage are used as examples of peak success.

The whole idea of startups being able to achieve hypergrowth is a relatively new one, mostly made possible by globalization (which gives businesses access to much wider markets) and information technology (which, through the cloud, gives businesses unprecedented scaling ability and the computing power to analyze their data — among many other benefits).

Not that long ago, the majority of businesses were started on the back of very humble aspirations. Just keeping a single brick-and-mortar location open long enough to sell it or pass it on to your children was widely considered a great success.

To be fair, it's still a great success. On the other hand, the ceiling has become much, much higher. Global success, billion-dollar valuation within a short time span, financial independence and early retirement: These are now possible for anyone — even if you're a 19-year-old college dropout with just $5,000 and an idea for an app.

Related: How To Master The Ebb And Flow Of A Hypergrowth Startup

What has killed countless startups, though, is not correctly estimating the effort that it takes to get there. It usually takes twice the time and three times the money that you think it will. There's a common assumption that a team, model or investor relationship can pivot as necessary to support hypergrowth, and that you can burn money for as long as it takes.

However, pivoting at the last minute usually just means you weren't really prepared to begin with. Sure, you might say, but how does one prepare for something like hypergrowth, which, by definition, is extreme in nature?

From what I've seen — and experienced personally — companies that manage hypergrowth successfully start with one basic rule and don't deviate: Does it scale? If not, don't do it. These companies also put energy and focus into three key areas: leadership, hiring and a culture based on data-driven decision making.


It's not exactly a secret that in order to become great at disrupting an existing market, businesses need great leaders. But there's no time at which it's more evident than during extreme growth. For that, a special "breed" of person is required —someone with off-the-charts optimism and a positive attitude that just won't quit.

Whether you are the founder, CEO or COO, whoever's running the operations side of the company needs to be someone who doesn't just thrive under pressure but knows how to motivate and help others do the same.

Related: Are You Ready to Lead a Hypergrowth-Stage Company? Ask Yourself These 3 Questions.


There's no universal consensus on best hiring practices for startups. There are a lot of different opinions out there, however a lack of fundamental planning in hiring is actually the most dangerous for startups on the verge of hypergrowth.

First, decide who will be executing the hiring process. Will it be the CEO or another team member? Develop an onboarding protocol. Determine which specific roles must be filled on an immediate basis and hire accordingly; a good rule to follow is to hire from the top down. Know what basic qualities are important to you as you build your startup and its company culture, qualities like honesty, ambition or good communication skills. This plan helps you prioritize which jobs to hire for and when rather than get bogged down in the details. This may seem basic, but it's vital, and failing to make a hiring plan far enough in advance can be a crucial misstep.

Related: The Biggest Mistake You Can Make When Hiring for a Job (and How to Fix It)


Rapid growth means you'll be inundated with exceptional new opportunities. At the same time, you'll be pulled in dozens of directions as new people come into the business. Where does that leave your team? Do they know what's going on at every level? Reaffirming and re-articulating your vision ensures that you don't waste your time and resources on what isn't necessary or relevant and enables you to be consistent as you delegate across many teams, offices and departments.

Hypergrowth must be approached with as much intra-organizational transparency as possible. The more clarity your team has about the company's strengths, weaknesses, risks and opportunities, the more you and your team can talk openly about how to proceed.

If you're unclear about how to achieve this, start thinking in terms of production analytics, performance indicators and other statistics. When everyone knows what everyone else is facing inside the company, new goals can be envisioned and achieved quickly, problems can be solved efficiently and progress can create across-the-board excitement.

Being extremely clear about company culture and bedrock values — for instance, radical transparency, extreme ownership and complete honesty — is a must to maintain your company culture.

Related: 10 Examples of Companies With Fantastic Cultures

Boundless optimism benefits from a small dollop of realism

There are no absolutes in the world of business. That's just to say that great leadership, good hiring and effective corporate culture can't guarantee a startup unicorn status any more than a star jockey can guarantee a horse the Triple Crown.

That being said, without that great jockey, even the most vaunted thoroughbred would struggle to win a race, and I've never seen a company without a solid leader and a clear vision survive hypergrowth, either.

What you do with this information is up to you, but I'm optimistic that, along with the right people, the right amount of optimism, and true radical transparency, it can take you and your business to whatever heights you've imagined.

Stu Sjouwerman

Founder and CEO, KnowBe4

Stu Sjouwerman (pronounced “shower-man”) is the founder and CEO of KnowBe4, Inc., which offers a platform for security awareness training and simulated phishing.

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