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The S-curve is a graph that shows a general pattern of growth. Technically, this curve is called logistic growth.
Originally discovered in population biology, the pattern is almost universal, at least as flexible as the well-known (but sometimes surprising) 20-80 rule.
(80/20 is also known as the Pareto principle, which states that 20% of your actions account for 80% of your results)
In the world of digitization, you see a lot of S-curves especially with software vendors:
- When a company is just starting out, there is no ideal flow or product yet. Development is still slow because there is little capital and customers are not yet working much with the solution.
- This is often followed by sudden, rapid growth in which market entry is rapid. New features are quickly added here that make it very valuable to the user. This is often the most innovative period when everyone suddenly switches.
- After rapid growth, some maturity develops. Usually the founders will now pay out their bonuses, possibly sell the joint venture. Minimal changes are now being made to the system and the main concern now is to retain existing customers for as long as possible in order to maximize revenue. Additional cash flows such as consulting, additional modules and other services to sell are now being deployed. But little real innovation.
- After this period, a system is often maintained but not developed.
Each phase has advantages and disadvantages for you:
In the beginning, you get a lot of attention and can be an innovator. In the later stage, however, there is more stability and certainty. Costs are often rising and outdated systems are no longer being developed, making it difficult to grow. The longer you put off renewing, the more expensive the move becomes.
The point is:
If you want to be an innovative player, you will have to work with a party that is also in this stage of life.
If you want to perform, you have to switch to parties and solutions that are in the right stage.
Innovators are constantly jumping from one curve to another.
This includes techniques, software types, careers, types of clients you want to help, really anything!
