# Growth Patterns — The Real Shape of SaaS Growth

The 12-month outlook in every plan (Section 10) describes a trajectory. This doc names the shape of that trajectory honestly — what real SaaS growth looks like, when to expect plateaus, and how to plan for the next leg of growth before the current one stalls.

Excerpted and adapted from *Founding Marketing* by Corey Haines.

## The long, slow SaaS ramp of death

Pitch decks show hockey sticks. Real growth shows a series of S-curves — each representing a distinct phase followed by a plateau that tests resolve and creativity.

### Phase 1 — $0 → $10K ARR (the grueling phase)

The hardest milestone. Every customer is a hard-won victory. Typical time: **6–12 months.** Most companies pivot the product multiple times during this phase.

What it requires:
- Runway long enough to keep experimenting until something clicks
- A financial cushion or additional income sources (often the difference between success and shutdown)
- Tolerance for ambiguity — the product positioning, the pricing, and the channel can all still be wrong at this stage

### Phase 2 — $10K → $100K ARR (the treacherous middle)

The middle ground that kills most promising startups. The average company reaches ~$40K ARR in year one. The danger: enough revenue to prove the concept, not enough to support a team.

The threshold to watch for: **$8–10K MRR.** That's when founders can typically go full-time on the business without other income sources. Until then, careful cash management or side income carries the company through.

Companies that flame out in Phase 2 usually run out of runway just as things start working.

### Phase 3 — $100K → $1M ARR (the acceleration phase)

Where things get interesting. Typical time: nearly 2 years total to reach $1M. But there's an acceleration pattern: **once across $100K, companies often double from $100K → $200K in one-third the time it took to reach the first $100K.**

Why: critical mass kicks in. Word-of-mouth starts working. Early customers become your best salespeople. The product has proven itself, and growth becomes more about execution than experimentation.

This is the phase where the marketing plan's 90-day roadmap (Section 9) starts compounding instead of just covering ground.

## Two real growth patterns (and the exponential myth)

The myth: successful SaaS companies grow exponentially, doubling revenue month over month like clockwork.

The reality: two distinct patterns, often combining at scale to *look* exponential when zoomed out.

### Pattern 1 — Linear growth

Build a predictable revenue machine. Find a channel that works (content, partnerships, paid, outbound) and steadily scale it. Some companies reliably add **$10K MRR per month** through a well-oiled marketing engine.

Less sexy than exponential. Far more sustainable. Crucially, **plannable**: when you know what you can count on adding each month, hiring decisions, product roadmap, and expansion planning all become tractable.

### Pattern 2 — Step-function growth

Periods of plateau followed by sudden jumps. Jumps aren't random — they're triggered by specific events:
- Breaking into a new market segment (e.g., enterprise after starting SMB)
- Launching a major product expansion (new feature line, new tier)
- Cracking a new marketing channel that compounds

Example: one founder saw revenue triple in two months after launching enterprise features — following six months of flat growth.

Key insight for the plan: **each step requires deliberate action and investment.** Steps don't happen by waiting. While standing on the current step, you have to be actively building the next one.

### How they combine

Zoom out far enough and a series of linear phases + step functions can look exponential. That's where the myth comes from. Understanding it's actually a series of plannable shapes changes how you build the plan:

- Don't chase the myth of doubling every month
- Build sustainable linear systems (Sections 4–8 AARRR moves)
- Plan deliberate step functions (Section 10 12-month milestones)

## Layering growth curves — Channel × Product × Market

The secret to sustained growth isn't one perfect channel. It's orchestrating multiple S-curves that work together. Three S-curves to track:

### Channel S-curves

Every marketing channel has its own lifecycle:
- **SEO** — 6–12 months to mature; once it does, steady leads for years. Marathon runner.
- **Paid ads** — quick wins; diminishing returns as you scale.
- **Content marketing** — slow to start, compounds beautifully over time.
- **Partnerships / co-marketing** — episodic; high yield when the right partner aligns.
- **Outbound** — predictable when calibrated; CAC-heavy and plateaus at team capacity.
- **PR** — spike-driven; sustains awareness rather than direct conversion.

**The rule:** start the next channel before the current one plateaus. Riding one channel to its ceiling before investing in the next produces a multi-month growth plateau that takes more effort to break out of than it would have taken to start the next channel earlier.

In the plan: Section 4 (Acquisition) names current channels, planned channels, and skipped channels. The 12-month roadmap (Section 10) sequences when the next channel investment begins.

### Product S-curves

Your core product naturally hits a growth ceiling as you saturate the initial market. Pushing harder on the same features doesn't break through. What does:

- Adding features that target new use cases
- Extending the product line to serve adjacent needs
- Expanding into new market segments (e.g., team collaboration added to a single-user tool — opens a new market)

In the plan: Sections 5 (Activation) and 8 (Revenue) name where the product needs to grow to unlock the next growth tier.

### Market S-curves

Every market segment has its own growth ceiling. Time the expansion into the next segment while the current segment is still showing strong growth. Common patterns:

- SMB → mid-market → enterprise
- Single vertical → adjacent verticals
- Domestic → international

Waiting until a segment is saturated makes the transition harder.

In the plan: Section 2 (Strategic frame) names current segment + future segments. Section 10 (12-month outlook) sequences when expansion moves begin.

### The orchestration

The real magic: while SEO is maturing, you're using paid for quick wins. As those channels mature, you're developing product features that unlock enterprise. Meanwhile, the groundwork for international expansion is being laid for when domestic saturates.

This is the operational thesis behind the AARRR mapping (Sections 4–8) and the 12-month outlook (Section 10): each section is a curve, and the plan sequences them so the next curve is ramping while the current one is still growing.

## The 3-3-2-2-2 VC growth path

For companies that have crossed $1M ARR and raised institutional capital, the VC benchmark is:

| Year | Multiple | Cumulative ARR (from $1M) |
|---|---|---|
| Year 0 | — | $1M |
| Year +1 | 3× | $3M |
| Year +2 | 3× | $9M |
| Year +3 | 2× | $18M |
| Year +4 | 2× | $36M |
| Year +5 | 2× | $72M |
| Year +6 | 2× | $144M |
| Year +7 | 2× | $288M |

Most companies don't hit this. Useful regardless — anchoring the 12-month outlook against this benchmark forces the plan to either (a) match it and show how, or (b) explicitly defend choosing a slower trajectory.

For non-VC-backed (bootstrapped, founder-funded, profit-focused) companies, this curve doesn't apply. Use linear or step-function targeting instead.

## How this informs the plan

| Section | What to include |
|---|---|
| **3 (Current state)** | Where the company is on each S-curve (channel maturity, product maturity, market saturation). Name the current phase ($0–10K / $10K–100K / $100K–1M / $1M+). |
| **4 (Acquisition)** | Current channels + their position on the S-curve (early / mature / plateauing). Next channel investment with rationale. |
| **5–8 (AARRR)** | Each section names the binding constraint at the current phase. For Phase 2 companies, Activation is usually the leverage point. For Phase 3, Retention + Referral compound the existing growth. |
| **9 (90-day roadmap)** | Linear-pattern moves dominate (predictable additions). Step-function setups (the build-up to a launch, an enterprise tier, a new market segment) live here. |
| **10 (12-month outlook)** | Sequence channel S-curves, product S-curves, market S-curves. If VC-backed Series A+, anchor against 3-3-2-2-2. If not, name the linear or step-function targets. |
| **13 (Measurement)** | The north-star metric reflects the current phase (Phase 1 is usually pure new-signup; Phase 3 is usually expansion ARR or NRR). |

## Operational guidance for the planner

- **Don't promise exponential.** If the plan implies doubling every month, the founder will use it against you in 90 days. Linear + step-function is honest.
- **Name the binding constraint.** Phase 1 binding constraint is finding any channel that works. Phase 2 is funding the team. Phase 3 is breaking the ceiling on whichever channel got you here.
- **Plateaus aren't failures.** They're the moment between two S-curves. The plan should anticipate them and stage the next move.
- **Don't conflate "growth" with "growth rate."** A company adding $20K MRR each month for 24 months has built a remarkable machine. The fact that the *percentage* growth rate declines as the base grows is arithmetic, not failure.
