IвЂ™m a big believer in unit economics even if you are in the hypergrowth category, because you want to be an efficient grower and you want to be putting a dollar of investment where itвЂ™s going to deliver the dollar of best return from the go-to-market model specifically. The phrase вЂњgrowing at all costsвЂќ can sometimes translate into something like вЂњdrunk and disorderly,вЂќ but thatвЂ™s not what itвЂ™s about. At that point, youвЂ™re continuing to invest, but I wouldnвЂ™t say at all costs, because at some point you really pivot into healthy growth. The biggest indicators that you can be in that top-quartile hypergrowth category are that youвЂ™re in a really big market and youвЂ™ve got a great productвЂ“market fit, along with good net retention. Sue Barsamian: Growth is obviously the highest correlation to value creation. McKinsey: Our research shows that although growth is correlated with value creation, itвЂ™s efficient growth that investors value.

If you get through that process and youвЂ™re still a little constrained in terms of TAM, or the competitive landscape has changed, you may need to actually start running a little bit leaner so that you can invest in your next play, because youвЂ™re going to need more opportunity in order to really scale.

If youвЂ™re lucky enough to get through productвЂ“market fit and go-to-market fit, and the market is still intact and big enough that you can just throw fuel on the fire, then value creation looks a lot like optimizing growth, because youвЂ™ve got the size and capacity in a market to do that. Once you get productвЂ“market fit, you get go-to-market fit, and then youвЂ™re ready to scale. If you go back to the beginning, obviously productвЂ“market fit is job one. Sue Barsamian: How you think about value creation is highly situational. How does the thinking around value creation evolve as companies grow and mature over time? McKinsey: You sit on boards for companies that are at very different stages in their life cycles-early stage, growth stage, and more mature public companies. An edited version of their conversation follows. Barsamian spoke recently with McKinsey partner Sid Tandon about the financial challenges that SaaS companies face in their early phases and how leaders and boards can address them for lasting impact. Earlier in her career, she held leadership roles at Mercury Interactive, Critical Path, and Verity. Previously, Barsamian held various executive positions at Hewlett-Packard, including chief sales and marketing officer for Hewlett Packard Enterprise Software.

Few industry executives understand that quandary better than Sue Barsamian, a seasoned leader who today helps SaaS and cybersecurity start-ups chart a course to hypergrowth, serving on the boards of such companies as Five9, Box, and NortonLifeLock. Balancing growth and profitability with investor interests is especially tricky for software-as-a-service (SaaS) companies, which have heavy up-front expenses and early revenue but challenges of net retention later on.

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