The Business S-Curve
Businesses fail because they succeeded and got pulled out of their sweet spot.
- Difficulty
- Easy
- Time to result
- ~ongoing to results
- Steps
- 4
- Confidence
- 90%
The S-curve explains why most businesses fail: they fail because they succeeded. A founder loves a product, the business climbs, and suddenly they are hiring, firing, handling healthcare and customer service, work they never signed up for and were never trained to do. Quality slips, relationships strain, and the curve turns downward toward a crash. Around 65% of businesses hit the ground here. The 35% that survive figure out how to install the systems and processes that let the plane climb again.
Origin
Miller lived the S-curve himself, diving for dollars in the early years, reaching about $3.5M, then realizing he had no systems. The pattern he observed in his own StoryBrand business and in the businesses he consulted for became the S-curve model that opens his book on growing a small business.
Core principles
- 01Nobody starts a business because they want to run a business; they start it for the product, the customers, or freedom.
- 02Success pulls the owner out of their sweet spot and forces them into the unfamiliar role of running a business.
- 03Without systems and processes, product quality and customer relationships degrade and the business heads toward the ground.
- 04The 35% that survive install systems and processes that pull the plane back up before it crashes.
How to run it
- 1
Start from love, not administration
You launch because you love a product, a customer, or the promise of freedom, and the business begins climbing the up-slope of the curve.
- 2
Get pulled into running the business
As it grows you are forced into hiring, firing, benefits, and customer service, roles you never imagined and were never educated for.
Watch out Even an MBA typically trains you to be a treasury official, not to run a small business.
- 3
Watch quality and relationships degrade
Because you don't know how to run a business, product quality drops and customer relationships strain, often after handing them to account executives.
Watch out Desperate moves like 90-day payment terms create cash-flow crises that finish the descent.
- 4
Install systems to climb again
The survivors figure out how to run the business, installing the systems and processes that stop the crash and start a new climb.
Pro tip The six systems of the airplane model are the specific processes that pull the curve back up.
In the wild
Miller's StoryBrand business climbed the initial rise of the S-curve to about $3.5M, consulting with giant brands, but he was making it up as he went with no installed systems.
→ A mentor's warning pushed him to build systems, turning the potential crash into a climb toward $17M.
Common mistakes
Mistaking early success for a stable business
The up-slope feels like winning, but without systems the same success that lifted the plane is what sends it crashing down.
Assuming a degree taught you to run a business
Most business education trains analysts and executives, not operators, so owners are unprepared for the actual job of running a company.
Is it for you?
Best for
Founders whose early success is now creating operational chaos.
Not ideal for
Owners who have already professionalized operations and installed durable systems.
From the transcript
“Most businesses... actually fail because they succeeded.”
“Nobody gets into business to run a business.”
“All of a sudden you're taken out of the sweet spot you were in when the business grew and you're put into a different role,…”
From the episode
Donald Miller: How To Make Your First Million, 6 Steps To Grow Your Small Business in 2023
Donald Miller