Discover the Thriving World of Gazelle Companies
What is a Gazelle Company?
A gazelle company is a high-growth business that increases its revenues by at least 20% annually for four years or more, starting from a revenue base of at least $100,000. This rapid revenue growth effectively doubles the company’s revenues over four years. Gazelle companies can be of varying sizes, from small businesses to large enterprises, and many are publicly traded, allowing investors to purchase and sell their shares.
Key Takeaways
- Impressive Growth: A gazelle company witnesses sustained annual revenue growth of at least 20% over four years.
- Industry Versatility: Though common in the technology sector, gazelle companies are also found in retail, apparel, and food and beverage industries.
- Peak Performance: The highly competitive nature of their markets can decrease growth rates over time.
- Job Creation: These companies are instrumental in job creation, providing substantial employment opportunities and driving economic growth.
How a Gazelle Company Works
The concept of gazelle companies was introduced by author and economist David Birch, who emphasized their role in job creation. Despite comprising only 4% of U.S. companies, gazelles accounted for 70% of new jobs, outperforming smaller businesses and large enterprises in job creation.
Although the modern definition of a gazelle has become more flexible, such companies remain significant job creators, particularly in open, entrepreneurial economies like the United States. They are prevalent in tech-driven sectors as well as in other high-growth industries such as food and beverages and retail.
Examples of Gazelle Companies
Some gazelle companies continue their remarkable growth, while others slow down or get acquired by larger competitors. Notable gazelles include tech giants like Apple, Meta (formerly Facebook), and Amazon. From nimble startups to industry dominators, these companies have transformed their respective landscapes but often find it challenging to maintain their high growth rates as they mature.
On the acquisition front, smaller but fast-growing gazelles frequently attract the attention of larger companies. For instance, Instagram, WhatsApp, and Oculus were all snapped up by Meta and continue to thrive under its ownership.
Related Terms: startup, innovation, market share, acquisition, Fortune 500.
References
- Research Institute of Industrial Economics. “Gazelles as Job Creators—A Survey and Interpretation of the Evidence”, Page 2.
- Small Business Economics. “Employment Effects of Business Dynamics: Mice, Gazelles and Elephants”.
