Is there a magical inflection point?

Answered by: Jason Pressman, Managing Director

Category: Marketing and Sales

It’s no secret that building a startup can sometimes feel like you’re lurching from challenge to challenge and crisis to crisis. All growing companies reach inflection points when a big and often difficult decision has to be made. Ultimately, startups experience multiple inflection points. That’s a good sign, because it means things are moving forward, but inflection points don’t mean the road ahead suddenly becomes clear. Rather, they present an opportunity to take stock in how things are going, learn, and perhaps make big changes that will get you to the next point along the way.

We’ve seen so many companies level off at $20M ARR (annual recurring revenues), $30M ARR and even $50M ARR. If you’ve figured out that the next 2000 customers are the same segment as the last 10, then you’re at an inflection point. You have to look deeply to see if the next customer is the same as the last customer. If you can add $200M in ARR by just executing against the next set of customers, then you know you’re at the next inflection point. It’s not a question of “Was that a good quarter?” It’s more about, “How did you get there?” And, “Can you do it again?”