Growing Pains: The Organizational Development of Technology Start-ups During Periods of Hyper-growth

Abstract

Hyper-growth is a social and organizational phenomenon relating to rapid company growth that has increasingly occurred in the start-up community. While hyper-growth is a common and recognizable term used in the industry, it is not clear why hyper-growth occurs in some companies rather than others and what social forces develop with this phenomenon. Through an analysis of in-depth interviews with hyper-growth tech companies and company growth data, I argue that hyper-growth is defined by an internal state of mind rather than a quantifiable metric of growth, caused by industry pressures and group interpretations of growth and success. It is found that hyper-growth intensifies the tension between organizational stability and operational growth, and many tech companies address these conflicting forces by fostering a unique and pervasive company culture. As they expand, hyper-growth companies attempt to maintain their organizational culture by hiring candidates based on their perceived cultural fit with the company. These findings have implications for the long-term prospects of hyper-growth companies: the constant organizational change and increased presence of homophily that can develop from hyper-growth have consequences for an organization’s ability to manage risk and endure external shocks within an industry.