Hockey stick growth
Factual definition
Hockey stick growth is a pattern of flat or slow growth followed by a sharp acceleration. It can describe historical data or a forecast, and the distinction should be explicit.
Read a projected tripling of the monthly revenue run rate
Hypothetical forecast: the monthly revenue run rate stays at 1.0x a fixed baseline in months 1–9 and reaches 3.0x that baseline by month 12. This is a forecast of the monthly run rate, not proof that total annual revenue triples; no actual history is supplied.
Scroll horizontally to read all columns.
| Forecast period | Monthly run-rate index |
|---|---|
| Months 1–9 | 1.0x |
| Month 12 | 3.0x |
| Intermediate path | Not specified; no annual total inferred |
Shayne Fitz-Coy’s definition of Hockey stick growth
Up and to the right. It is what everybody wants to see on the chart and it is in almost every deck you will be handed.
Build the acceleration from customers and capacity
Hypothetical forecast test. A subscription business has 100 customers paying US$1,000 per month, so monthly recurring revenue is US$100,000.
It forecasts US$300,000 by December at the same price, with no expansion revenue. That requires 300 customers.
If 20 of the original customers leave before December, the plan needs 220 new customers still active in December.
Compare that required 220 with the sales pipeline, conversion evidence, implementation slots and staff available to support the accounts. If onboarding can accommodate only 150 new active customers by December, and the other assumptions hold, the attainable count is 230 and monthly recurring revenue is US$230,000.
The shortfall is US$70,000 per month, not US$70,000 of full-year revenue.
The next question is what evidence would justify more capacity or a different conversion rate. Diligence on forecasts tests the assumptions behind the outcome.
Keep the original run-rate chart labelled as a forecast, and use the customer bridge to revise the forecast or the resources required to deliver it.
Where Hockey stick growth fits
Explore this term in the glossary cloud →