This editorial appeared in the March 6th, 2025, issue of the Topline newsletter.
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In the early 2000s, Corporate Executive Board (CEB) published one of its most influential studies: Stall Points.
They set out to answer a deceptively simple question: Why do high-growth companies suddenly hit a wall? What causes once-thriving businesses to slow down—often permanently? And, most importantly, how do you break free once you’ve stalled?
The findings were sobering:
- 85% of all high-growth companies stall at some point.
- 87% of the time, the stall is due to management error—not the economy.
- Only 25% of companies that stall ever recover.
Let that sink in for a second.
Most businesses hit a growth plateau at some point. And most of the time, it’s our fault. The way we set strategy, build teams, and make decisions is usually what leads to the slowdown.
And once you’ve stalled? Odds are you won’t make it out.
I know this firsthand. Pavilion itself stalled in 2022. Growth slowed, momentum faded, and for the past three years, we’ve been clawing our way back. Now, in 2025, we’re finally seeing renewed signs of growth. And I’ve learned a lot about what really causes companies to stall—and what it takes to turn things around.
Stalling Isn’t Just Slower Growth—It’s an Existential Crisis
For any business, going from 70% growth to 30% growth can wipe out millions—sometimes hundreds of millions—in valuation. A company that grows fast commands premium multiples; a company that stalls gets hammered.
The problem is, stalls don’t happen overnight.
The warning signs are there long before the numbers turn red. Slowing win rates. Longer sales cycles. More competitive deals. A creeping sense of fatigue in the team. But most leaders don’t act until the slowdown is undeniable. By then, it’s often too late.
If you’re experiencing any of these signs, you might be at risk:
- Your pipeline feels thinner, even though your team is working just as hard.
- Competitors are closing deals you used to win effortlessly.
- Customers are taking longer to decide—or choosing lower-cost options.
- Expansion revenue is slowing, and logo churn is creeping up.
- Your product-market fit feels just a little less solid than it used to.
So what do you do?
3 Common Causes of Revenue Stalls—And How to Fix Them
CEB’s research identified three major reasons why companies stall. These patterns show up across industries, markets, and company sizes. If you’re in a slowdown—or want to avoid one—these are the areas to focus on.
1. Premium Position Captivity
The Problem: You get too comfortable in a high-end niche and fail to adapt when the market shifts.
A company with a premium product and strong margins often ignores early warning signs of disruption. Why chase low-end customers when you’ve built a category-defining brand?
Then one day, your margins are someone else’s opportunity.
Suddenly, a competitor enters with a lower-cost option. Maybe they’re scrappier. Maybe they’ve stripped away the extras and built something leaner, easier to use, more accessible.
This is The Innovator’s Dilemma in action. You spend years perfecting a beautiful business—only to watch a new player siphon off the low end of the market.
The Fix: Defend the Base.
- Don’t assume your current position is unassailable. Monitor low-end competition.
- Consider tiered offerings or feature-gated products to capture lower-market buyers without eroding your core value.
- Optimize pricing—adjusting your packaging and market segmentation before your competitors force you to.
Complacency in a high-margin niche is how you wake up one day and realize someone’s drinking your milkshake. Don’t let it happen.
2. Abandoning the Core Too Quickly
The Problem: You assume your market is tapped out before you’ve actually optimized it.
This is one of the biggest mistakes growth-stage companies make. You hit an initial surge of adoption, then growth slows. Instead of refining your motion, you assume the market is saturated and start chasing new ICPs, new industries, or new business models.
Here’s the reality: Markets are almost always bigger than we think.
More often than not, growth stalls because of poor execution—not because you’ve truly exhausted your market.
When you stretch too thin, your core customers feel abandoned. The new markets don’t convert. You’re neither here nor there.
The Fix: Data Over Intuition.
- Measure win rates, penetration rates, and expansion revenue. If your win rate is declining, it’s usually an execution problem—not a market-size problem.
- Validate before pivoting. Don’t just assume you’ve exhausted your TAM. Test and optimize your existing motion before you chase new ICPs.
- Be skeptical of advice to “move on.” You’ve invested years building relationships with your current market. Don’t abandon them unless you’re absolutely sure the opportunity is gone.
3. You Don’t Have the Right Talent
The Problem: The team that got you here isn’t always the team that will get you to the next level.
Early-stage startups win with scrappy execution. But as you scale, you need new muscles—stronger finance, product, sales, and operations leadership.
Many founders hesitate to upgrade their team—out of loyalty, cost concerns, or just a lack of awareness that they’ve outgrown their org structure.
The Fix: Develop the Bench.
- Invest in frontline managers. Your Directors and Senior Directors should be able to independently execute plans based on your strategy. If they can’t, you have a bottleneck.
- Make tough calls early. If you know someone isn’t scaling, don’t wait. A slow decision here creates a fast stall later.
- Think about succession planning. The goal isn’t just to hire great leaders—it’s to develop a leadership pipeline that keeps the company moving forward.
Getting Unstuck
Revenue stalls happen to almost every company.
The bad news? If you’ve stalled, it’s likely because of decisions you made.
The good news? That means you can fix it.
Companies that recover from stalls don’t wait for the market to change. They don’t blame the economy. They diagnose, adapt, and execute.
So if you’re seeing signs of a slowdown, take action. Defend your core. Interrogate your data. Strengthen your team.
Because only 1 in 4 companies ever rekindle their growth.
But you can be the one.
