A gazelle company is a high-growth business that expands fast enough to create a disproportionate share of new jobs and economic value. The term is usually used for scale-ups that keep growing beyond start-up survival, often doubling over a few years through a repeatable market, team and operating model.

Who came up with the idea of using the word gazelle to describe a company? Huge businesses, like IBM, are referred to as elephants, Lou Gerstner even wrote his classic Who Says Elephants Can’t Dance? after he managed the commercial and cultural transformation at the business.

In contrast to the elephants, the smallest and most prolific are referred to as mice, the mom and pop stores. But what is a gazelle company? David Birch first developed the idea of the gazelle company during his early work on employment and evangelised the concept in his book, Job Creation in America: How Our Smallest Companies Put the Most People to Work. His theory was that small fast-growing companies were the biggest creators of new jobs in the economy.

Dominic Monkhouse during a workshop

In his influential book published in 1987, David Birch explores how jobs are created and destroyed in the United States. His data is derived from 12 million companies studied from the late ’60s onwards. His results showed that the population of businesses was extremely volatile, every year millions of new companies were formed. A significant portion, especially small firms, experience rapid growth. He estimated that these rapidly growing gazelles comprise only 4% of all US firms, but account for 70% of all new jobs. These firms had a minimum revenue of $1m and more than doubled in four years.

Gazelle Life Cycle of a Company
image from gazelles.com

So before the world was wondered what scaling up was all about it was talking about gazelle companies. Who they were and how to create more of them. Verne Harnish author of the Mastering the Rockefeller Habits: What You Must Do to Increase the Value of Your Growing Firm even picked the name and image of the gazelle for his global coaching firm.

Gazelles are surprisingly rare creatures. In 2008 Zoltan Acs, director of the Center for Entrepreneurship and Public Policy at George Mason University, published a study finding that a mere 2% to 3% of all companies were high-impact firms. During a recession elephants and mice reduce headcount, and the deeper they cut jobs the higher unemployment rises. When the economy picks up again and it comes to job creation, they are almost irrelevant. Its gazelles doubling every four years that create growth in jobs.

What should you do next?

Gazelle growth is attractive until the business starts outrunning its systems. Fast growth exposes every weak habit in the team.

The job is to turn speed into repeatability: clearer market focus, stronger leadership, better hiring and a rhythm that keeps cash, people and execution connected.

That is the point. A gazelle company is not just a company that grows fast. It is a company learning how to make fast growth survivable.

Four ways to take this further

  1. Book a call. If your company is growing quickly but the operating model is not keeping up is now constraining growth, Dominic can help you decide whether the problem is market focus, leadership capacity, hiring pace, cash discipline, or weak operating rhythm. No obligation, no pitch. You will know quickly whether this is the right kind of help.
  2. Grab the book. Mind Your F**king Business gives founder-CEOs a practical way to stop being the bottleneck and build a company that can scale without them in every room.
  3. Understand what scaling up really means. Read this next if you want to separate genuine scale-up growth from ordinary small-business expansion.
  4. Subscribe to the newsletter. Get a weekly founder-CEO note on the operating habits that make fast growth less chaotic.

Your move. Look at your last 90 days of growth. Name the one system that would break first if the same pace continued for another year.

About the author

Dominic Monkhouse scaled Rackspace UK and Peer 1 Hosting as Managing Director, taking both to a £30m annual run rate. He is the founder of Monkhouse & Company.