Growing out of your clothes

There's a lifecycle that most product companies go through. It's not the neat startup-to-scale arc you read about in business books. It's messier, more cyclical, and honestly more dependent on timing and self-awareness than anyone likes to admit.

I've been through it twice now, at two very different companies. And I've started to think it's pretty much universal.

It starts with nothing. You have a product, or at least something you're calling a product, but not really a business. Revenue is negligible. You're searching for signal in the noise, trying to find out if anyone actually cares about what you've built.

Then you spot a pattern. Maybe it's a cluster of users doing something specific with your product that you hadn't quite designed for. Maybe it's a value prop that keeps resonating in sales calls. Maybe it's a message landing in trialled PPC ads to your target audience. Something clicks, and you can see where the pull is. So you lean into it. You build fast, cut corners deliberately, optimise for learning. This is the scrappy phase, and it works. Revenue starts to grow.

And then the thing nobody warns you about happens: inertia.

The decisions that got you here start to harden. The quick architectural choices, the product bets, the business model assumptions. Simon Wardley has written extensively about this. He identifies inertia as one of the most powerful forces in business, and the bit that surprised me is that it's not failure that creates inertia. It's success. The more something has worked, the harder it becomes to change.

Category	Type of Inertia	Description
Past Norms	Loss of Political Capital	Resistance from those whose power is tied to the old system.
	Social Capital (Relationships)	Disruption of established vendor or partner networks.
	Threat to Barriers to Entry	Fear that the change makes it easier for new rivals to compete.
	Rewards & Culture	Internal incentives that still promote "the old way."
Transitioning	New Skill-set Costs	The friction and cost of retraining the workforce.
	Physical/Financial Capital	Resistance to writing off "good" assets that are now obsolete.
	Declining Unit Value	Moving from high-margin products to high-volume/low-margin services.
	External Financial Markets	Pressure from investors to stick to proven (but dying) revenue streams.
Agency (Healthy)	Suitability	Questioning if the new evolution is actually ready for prime time.
	Lack of Second Sourcing	Fear of being locked into a single provider for a new utility.
	Lack of Pricing Competition	Concerns that the new market isn't yet efficient or competitive.
	Strategic Control	Fear of losing "sovereignty" over a critical component.
Business Model	Past Success Data	Using history as "proof" that change isn't necessary.
	Cannibalisation	Fear that a new product will eat the profits of an existing one.
	Impact on Customers	Legitimate concern that your current users aren't ready to move.
	Expert Resistance	Technical or subject-matter experts identifying genuine flaws.

Wardley's favourite example is Blockbuster. They were first with a website. First with online video ordering. First with streaming experiments. And first to go bankrupt. Not because they couldn't innovate. They out-innovated almost everyone. But their business model was built on late fees, and they couldn't let go of what was working.

At a smaller scale, Wardley tells the story of Fotango, a company he ran himself. His team built arguably the world's first serverless platform in 2005. Then the parent company's consultants came in and declared the future was 3D television. The platform was shut down. Past success in the parent's existing business overrode the innovation happening right under their noses.

These are different flavours of the same problem. At Blockbuster, the inertia was in the business model. At Fotango, it was in leadership assumptions. I've seen both. Technology-driven inertia where tech debt makes it physically impossible to ship anything. And product-driven inertia where the same thinking gets repeated because it worked once, even as the results stop coming. One can lead to the other too. If your product leadership keeps pushing ideas that don't land, your best engineers leave, and suddenly you've got both problems at once.

The analogy I keep coming back to is growing out of your clothes. A company at £2M ARR is wearing the architecture, the product thinking, and the team structure it stitched together at zero. It still fits, technically. But you can't move properly. Every new feature has to squeeze through gaps that weren't designed for it. At some point you're not iterating any more. You're just tugging at seams.

Most companies don't make it through this stage. The investment required to rebuild the foundations is enormous. The outcome is uncertain. You're spending significant money and time without shipping anything new, and the whole time you're asking stakeholders to trust that this invisible work will pay off. It feels more likely to kill the company than save it. A lot of teams just keep tugging at the seams instead, and the gap between intention and delivery quietly widens until it's too late.

The companies that do break through don't do it by accident. It takes deliberate financial investment, buy-in from every stakeholder, and a genuine willingness to accept that the thing which got you here won't get you there. It's a bet. Not a natural progression.

If you survive it, you don't end up back at the start. You end up back in experimentation, but now you're splitting time between two things: the boring feature improvements customers have been asking for (for years, while you were stuck) and the R&D work to find what scales you to the next level. It's scrappy again, but the stakes are higher and the margin for error is thinner.

Lots of stars have to align. The right product thinking to move forwards. The right balance of scrappy engineering and quality at the right times. The self-awareness to know which mode you're in. Get the timing wrong on any of those, and you choke.

I don't think there's a formula for getting through this. But I do think naming the pattern helps. If you can recognise when you're tugging at seams rather than building something new, you've at least got a chance of making the right bet at the right time.

Have you seen this cycle play out? I'd love to hear where you are in it.