Hypergrowth is a term used to describe companies achieving annual revenue growth of 40% or greater. Harvard Business Review coined the word in 2008 to describe the companies that dominate the high-growth economy, and the concept has gained prominence in recent years as tech and tech-enabled companies have redefined traditional growth curves. Our new business reality—rapidly advancing technology and new business models—is such that founders can and should reasonably target hypergrowth for their companies.
At its core, Toptal is a company passionate about driving hypergrowth, and therefore we wanted to explore what commonalities exist among the fastest growing organizations. Recognizing our unique connective position with hypergrowth companies, we decided to launch a survey to understand the tech stack (technology choices) that our clients have made and how these relate to their success.
We hope these findings prove useful as you compare them to the technology stack of your own company. It is important to note that there is no surefire way to hypergrowth and many startups have pursued quite different technological paths to get there.
Infrastructure for Hypergrowth Companies
Hypergrowth startups are definitively choosing the cloud (90%+) over more traditional forms of hosting, including shared servers and on-premise hosting. In this way, companies with a cloud technology stack are avoiding the high up-front expenditure on hardware while gaining flexibility, simplicity of deployment, and the ability to more easily scale their product.
The dominant player in cloud computing is also the one chosen most frequently by hypergrowth startups for hosting their company. Amazon Web Services (AWS) was originally launched internally in 2002 before a public launch in 2006, and offers a collection of web services in the cloud at competitive prices. Leading startups can get an edge hosting on Amazon through its cost-effectiveness and wide breadth of value-add services that boost productivity and streamline operations.
Startups on Microsoft Azure
As startup tech stacks go, Azure is the only cloud service where, of those startups surveyed, the majority are currently experiencing hypergrowth. Microsoft’s cloud offering has emerged as a strong competitor for AWS and has rapidly gained supporters (it’s growing 2x faster than the market leader). While the ecosystem for Azure is less mature, it can be an excellent choice if you are developing on .NET or if you think you may want to employ a hybrid cloud/onsite approach.
Back-End Tech Stack
When examining choices made on the back-end, there are no clear winners. Hypergrowth companies are successfully using PHP, Node.js, .NET, Ruby on Rails, Python, and more. Each of these back-end languages has associated advantages and downsides, and often the selection of one over another can depend on the type of service your company provides (e.g., Python for scientific computing) or simply the experience your developers have.
Python and Node.js Together
While not the leader in absolute numbers, over 70% of companies using a combination of Python and Node.js for their back-end were experiencing hypergrowth.
In our sample, 50 percent of hypergrowth companies were using just two relational databases: MySQL or PostgreSQL, with a slight preference for the latter.
MySQL and PostgreSQL offer immediate benefits for startups:
- Low cost (both are open-source);
- Offer high performance;
- Provide good security;
- They are easy to configure and scale.
PostgreSQL is a hypergrowth favorite for providing comparable features to licensed vendors in terms of data capacity, reliability, and data integrity.
The third and fourth most popular choices offer intriguing alternatives. Microsoft SQL Server is a licensed database that supports hypergrowth through productivity gains—it’s easy to use, simple to troubleshoot, and comes with a host of excellent tools. MongoDB, also open-source, may make sense for companies with high volumes of data that want to take advantage of a powerful NoSQL database. And, with great tools, it’s easier to switch to a non-relational database than ever before.
Unsurprisingly, mobile has become a priority for all companies we sampled: both hypergrowth and slower growing organizations place equal importance on having a mobile strategy. Approximately 70% of surveyed companies in both categories rated it as one of their top priorities. The variation occurred when examining how companies prioritized mobile platforms.
When deciding on mobile development technology stack, we observe that hypergrowth startups are over three times as likely to prioritize iOS than Android (35% vs 11%). While many still choose to prioritize neither of the platforms, the discrepancy between iOS and Android is significant when considering that the latter is the global leader in market share. At the same time, cross-platform options—Xamarin and Phonegap—account for less than 5% of all hypergrowth companies, suggesting companies are on the whole prioritizing native.
Although only 15% of hypergrowth companies in our survey used React Native, companies prioritizing React Native were much more likely to grow faster than any other platform.
Artificial intelligence (AI) was the top choice among all companies as the technology that will have the greatest impact. This broad belief fits with what we see when examining what technologies hypergrowth startups are using in their products. While blockchain remains front and center in the news, the Internet of Things (IoT), humanized big data, and AR/VR also promise to be impactful technologies.
Presently, 38 percent of surveyed hypergrowth startups are employing a form of AI in their business. With multiple subdomains (including machine learning, expert systems, NLP, and others), AI has a host of applications that can drive value allowing companies to better use their data, to improve operations, and to directly provide tailored services to customers.
While AI rules the day, and other emerging technologies are making their presence felt, it is important to note the 47 percent of hypergrowth startups are not reliant on any new technology.
This highlights the rule that a great company does not need to use the latest trend unnecessarily; ultimately hypergrowth comes from providing customers value, no matter the vehicle.
Beyond the technical choices reviewed above, there is another area where the fastest growing companies are distinguishing themselves. Hypergrowth companies are hiring more on-demand software developers (e.g., freelance talent) than their slower growing counter parts.
The benefits of using freelance talent are numerous and go beyond mere cost-savings. While many companies turn to contractors out of necessity, actively integrating freelance developers can also:
- Grant organizations immense flexibility in how they deploy resources.
- Provide access to expertise and experience that might not exist internally.
- Allow for rapid scaling of teams after a capital raise or for product launches.
- Bring outside perspectives that help drive innovation in companies.
Hypergrowth companies likely realize a combination of the advantages listed above. While certain restrictions or preconditions may limit a company’s choice of technology, the use of on-demand talent is not limited in this way and thus supports growth for organizations no matter what a company’s industry or product.
To compile the Hypergrowth Tech Stack Report 2018, Toptal surveyed its clients to understand the technological and operational choices they were making. The sample highlighted in this report is the subset of companies growing at hypergrowth levels (40%+ annually) unless otherwise specified.