How fast should you grow?

Good morning, Riveters.

Growth is getting harder to fake. The economy’s flashing mixed signals, AI’s moving faster than the regulators chasing it, and founders are learning that speed without capacity is a liability, not an edge. This week, we break down how to choose the right growth pace for your company, the latest shifts in the U.S. economy and startup funding, and one simple play to scale efficiently without burning out your team.

Plus, how AI adoption can separate the resilient operators from the reckless ones.

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Economy
The U.S. federal shutdown is now estimated to cost $11 billion if it lasts six weeks, rising to $14 billion for eight weeks. That estimate comes from the Congressional Budget Office and was reported earlier this week.
What this means to you: If you’re a founder, plan for tighter cash flow and slower government payments/contracts, especially if your business depends on federal agencies or indirectly on them.
Source: Reuters

AI
A leading media trade group has asked for new rules to govern AI development, aligning with the federal position and signaling upstream regulatory risk in AI product roadmaps.
What this means to you: If your startup leans into AI (model training, large language models, inference), it’s time to build compliance and governance into your road map. Regulatory surprise is no longer hypothetical.
Source: Media Post

Startups
While mega-rounds aren’t headline news every week, venture capital flow remains active. According to VC News Daily, a recent tranche of U.S. startups announced large funding rounds: e.g., a $150M Series C for an AI-law platform and a $225M minority investment in a fintech wellness firm.
What this means to you: If you’re fundraising, competition for the top deals remains fierce. Positioning now around capital efficiency and governance (see above) might make you stand out in a crowded field.
Source: VC News Daily

Growth used to be a brag, now it’s a warning label.

Every founder wants to move faster. Few stop to ask if their company can actually handle it.

Gary Pisano at Harvard calls this the “Rate, Direction, Method” problem. How fast you grow, where you grow, and how you plan to do it. Most teams only answer the first question. They chase demand and ignore whether their people, product, and processes can keep up.

Peloton learned this the hard way. Its pandemic surge became a recall nightmare.
Meanwhile, a burger chain called Pal’s Sudden Service quietly dominated its niche by tying new store openings to one metric: manager readiness. When leadership couldn’t train another, they didn’t grow. That restraint made Pal’s one of the most efficient operators in the country.

The lesson? Pick a speed your team can metabolize, not one just to impress investors.

CodeVentures puts typical startup growth at 20–30% a year. Going faster?
Have a plan for what breaks next because something will.

They suggest tracking a Sustainable Growth Rate: how much you can grow based on your return on equity, retention, and real expenses. Ignore those numbers and you’ll “grow into insolvency.”

Funding in 2025 hasn’t made things easier. A survey of 1,500 startups shows founders are raising smaller rounds, most under $5M, and mixing capital sources instead of chasing unicorn checks. Growth is now a game of endurance, not explosion.

AI is the one cheat code left. Startups using it report double the optimism of those that don’t. Not because it prints cash, but because it expands capacity to do more with the same people.

1. Choose your speed intentionally.
Map what your company can actually absorb—hiring, onboarding, quality control, infrastructure. If you can’t name what breaks when you hit your plan, your rate’s too high.

2. Add guardrails.
Track your Rule of 40 (growth + profit), your burn multiple, and your growth endurance. When two slip for more than a month, tap the brakes before something expensive breaks.

3. Expand with management capacity.
Don’t open new markets or launch new SKUs until the next layer of leaders is trained and ready. Growth without managers is chaos in disguise.

4. Use AI to buy breathing room.
Automate low-value work—support, QA, reporting—before you chase new revenue. Raise your ceiling before you push the gas.

Make a Capacity Map.

List your headcount, onboarding bandwidth, product pipeline, and support load. Then ask: Can we actually digest 25% more next quarter?

If not, the smartest move might be slowing down.

Because in 2026, the winners won’t be the fastest, they’ll be the ones still in control when everyone else runs out of gas.

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Fixing the Capacity Map First

Before you push into new markets or ramp up spending, spend your week building a simplified “capacity map” that outlines your real hiring, onboarding, tooling, product-support, and cash‐flow headroom—and then set your next growth sprint to no more than 70% of that capacity.

Teams burn through their budget or sacrifice quality not because they misread demand, but because they ignored supply constraints. When you grow too fast, you force your organization to deploy firefighting systems, hire quickly, and slip into performance debt. By proactively mapping your capacity, you invert that problem: growing at a pace your systems can handle, maintain operational integrity, and preserve cash for expansion instead of crisis. Set a sprint target you know your team can deliver on, embed a simple health-check each week (new hires onboarded, support backlog, feature defects, burn multiple), and use these signals to decide whether to accelerate, hold, or pull back.

That’s real, scalable, efficient growth—not just chasing a % number.