The Path to Exponential Growth

For years, a product can grow linearly before suddenly seeing compounding growth. Facebook is a great example. From 2004 to 2007, the company grew at a fairly linear rate. And then, the magic happened! The network effects kicked in and exponential growth ensued.

"Facebook User Growth"

Linear growth always precedes exponential growth. For market places, in social networks or in advertising exchanges, the story is always the same. Linear, linear, linear. BOOM, exponential. One day, the magic happens. "How Long Does It Take to Reach 25M Users?"

I saw this first hand at Branchout. If you ask Rick Marini, Stan Chudnovsky and the Branchout team how they grew from 1M to 25M users in a matter of weeks, and I did at a Redpoint portfolio company event focused on viral growth, they won’t offer you any defined roadmap. Instead, they will point to a series of small, linear, consistent improvements leading to an avalanche. This is the story behind every exponential growth story.

Because humans are exceptionally terrible at distinguishing the difference between linear growth and early exponential growth, we cannot predict the avalanche. We can only continue to trudge through the snow, all the time making our products a little bit better at a time.

Published 2012-08-14 in

I am a partner at Redpoint. I write daily, data-driven blog posts about key questions facing startups. I co-authored the book, Winning with Data. Join more than 20,000 others receiving these blog posts by email.

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