The Year to Be Great

Key takeaway

• For entrepreneurs: 2024 is the year to refocus on generating fast growth, aiming for 30-50%+ CAGR, to become a "Great" company with $5B+ market cap potential.
• For investors: Look for companies that are not just efficient but are pivoting back to growth, especially those leveraging AI to expand their market reach.

Summary

David George argues that after years of focusing on efficiency, 2024 is the time for growth-stage companies to strive for greatness. He defines a "Great" company as one that innovates continuously, has a defensible business model, outperforms competitors, and has the potential to become a $5B+ public company. The article emphasizes that while efficiency is important, rapid growth is crucial for achieving greatness, with data showing that 84% of analyzed great companies grew at over 30% CAGR.

Insights

• Great companies typically grow at a 30-50%+ compound annual growth rate (CAGR).
• Operating leverage should be lower than revenue growth for companies with >$100M revenue.
• The number of great public companies has increased from 3 to almost 80 in recent years.
• AI is expected to accelerate the creation of great companies, potentially leading to 200-300+ such companies in the next 5-10 years.
• Efficiency alone doesn't build a generation-defining company; it's considered table stakes.

Implications

• Entrepreneurs should shift focus from pure efficiency to growth strategies in 2024.
• Investors should look for companies that balance efficiency with strong growth potential.
• The AI revolution may create numerous investment opportunities in the coming years.
• Companies aiming for greatness need to continuously innovate and evolve their products.
• The market for great companies is expanding, increasing competition but also opportunities.