The "slow" growth model

I had a great due diligence call with a company we’re working with yesterday. They are led by a strong and experienced management team who has taken a previous company public. During a period where everyone went to growth at all cost, this management team decided to stick their plan.

The company has been around for over 11 years in a fast growing tech industry. Many of their competitors started later, grew faster and some have even exited before this company. The growth at all cost model had been popularized and rewarded in the previous 5 years. During this period, this company was probably a bit overlooked and even “unsexy” due to their slower growth rate.

Nowadays, they are sitting pretty with consistent growth in a market where many of their competitors are struggling. They have a product in which customers love and they have a low employee churn. They have enough capital for years and can trigger how much cash they want to burn for growth each year.

As I learned more about the company yesterday, I couldn’t help but think that their time is now. They’ve just built a damn solid company where they could control their destiny. Unfortunately not many startups created the last 10 years have that luxury today.