How Businesses Grow

The natural growth path of businesses is very similar to that of humans.

image: goldmansachs.com

In the beginning, there is lots of hope and potential. Everyone close to the child see greatness ahead for the child. Then gradually some of those hopes fade away as the reality of parental resources and environment sets in. The nursery school and primary school activities make the child look very far away from any of the great deeds predicted for it.

Then at secondary school, some of the hopes get rekindled. At university, all those potentials start looking real again. And after university, the child is now someone again with all those initial hope and potential. Finally, the child achieves some level of greatness like predicted for it in the beginning.

What is the difference between the child who grew up to be one of the greatest men of his day and the one who grew up to be just average? They both started up with equal potentials and hopes. The difference lies in the path each followed after birth, and not the size of the baby at birth.

And so it is with companies/businesses. How far you will go has very little to do with how you started but what you did since you started.

The world is full of great companies that started as a child's hobby -- Microsoft, Apple etc. We love to take inspiration from the humble beginning. Even the mighty Shell Oil Company started as a sea shell trading company (I think I am right, no time to cross-check). All the difference between them and every other company that started the same time they started but are no more or unknown (insignificant) is in all each company did after starting.

One company acted more like the child who paid attention in school, who had extra after school classes, who was sent to good schools, whose mind was well developed and who attempted great things. The other company just kept existing.

As a business owner, the bulk of your work starts after you set up the company. If you don't just want to exist or fade away, then you have to work hard (harder than you did setting up the company) on growing the company. On stretching the company's competence, competitive advantage, capacity, learning and on attempting big things (taking bold bets). Because that is how businesses grow.