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How the "Balloon Effect" Can Spark Business Growth

By Lou Whiteman - Jan 29, 2021 at 7:00AM

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Morning Brew's co-founder reflects on his company's rapid growth.

Co-founders Alex Lieberman and Austin Rief built Morning Brew from a dorm room project to the go-to source for millennials seeking business news in just six years. 

The growth, according to Lieberman, was not linear. During his Jan. 16 appearance on Motley Fool Live, Lieberman and Motley Fool marketing manager Margaret Powell discussed a concept he calls the "balloon effect," and what it means for young companies looking to rapidly expand their reach.

 

Alex Lieberman: The last thing I'll say is this idea of the balloon effect, which I've written about is, I think the Morning Brew has experienced this. I think that even in some ways, it's something that The Fool has experienced over The Fool's history. When I think about famous YouTubers like MrBeast or David Dobrik, the way that the balloon effect works is, a company is relentlessly focused on creating great products and getting customers organically for a long period of time. So let's say a business has been around for 10 years. Basically, the idea of the balloon effect, just for eight of those years, the business isn't getting a lot of recognition, it isn't that massive yet, it's growing gradually and linearly, but it hasn't exploded yet. Almost like this process of filling up a water balloon in the sink. When you're holding the faucet open that's all the work you need to do to fill up the balloon. You never know when the balloon is getting a pop, but when it does pop, you clearly know when it pops, water goes everywhere. I think there's this concept of there's a tipping point, which you've produced enough great product, enough people are talking about you through word of mouth. That's something clicks, something pops and all of a sudden the growth in your business is exponential. I think when we look at Morning Brew, that has been the last year-and-a-half for us. Before that point, for three-and-a-half or four years prior to that, it was very much like no one knew us. We were creating a nice business and it exploded into a significantly larger business.

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