The hockey stick effect describes a growth curve in which a company initially experiences only moderate growth over a prolonged period, before experiencing a sudden and sharp surge in growth. The shape of the curve is reminiscent of a hockey stick: a long, flat shaft and a steeply rising head.
In the start-up context, the ‘hockey stick effect’ often refers to the moment when a business model scales successfully and growth accelerates significantly.
Typical key figures where hockey-stick growth can be observed include:
- Revenue trends
- User or customer figures
- recurring revenue
- Market shares
- Platform activities or transaction volume
Such a surge in growth is often driven by factors such as:
- Achieving product-market fit
- successful go-to-market strategies
- strong network effects
- viral growth
- Scaling up sales and marketing
- technological or operational efficiency gains
The hockey-stick effect is particularly attractive to start-ups, as it often signals that the company has reached a critical phase of growth and that its business model is proving successful in the market.
At the same time, it should be noted that many start-ups forecast a hockey-stick growth curve in their early financial plans; however, this is only realistic if it is based on sound market and growth factors.
Investors often view sustainable growth more favourably than short-term growth spikes that lack long-term stability.
The hockey stick effect therefore represents not only rapid growth, but ideally the successful transition from market validation to a scalable growth phase.
innoWerft supports founders in developing growth strategies, achieving product-market fit and laying the foundations for sustainable scaling and long-term business success.