Your growth strategy might be wrong

Good morning, Riveters.

This week’s Rivet Report looks at the kind of growth most founders ignore, even though it’s sitting right inside their customer base. We dig into why existing users are often a startup’s strongest source of new revenue, along with the signals that show when expansion is about to unlock.

Plus, you'll discover what the latest moves in the economy, AI, and startup funding mean for your next quarter. A tight, practical issue ahead.

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Economy
U.S. consumer sentiment ticked up slightly in early December, after sinking in November. The University of Michigan survey put its Consumer Sentiment Index at 53.3, up from 51.0 a month prior. Still, worries about high prices and a shaky labor market remain top of mind for many households.

What this means to you: As a founder or operator, now is a good time to double-check how you’re communicating value to customers. Rising price sensitivity means strong product value and clarity will help retention, especially if you sell to consumers or SMBs.
Source: Reuters

AI
The Organization for Economic Co‑operation and Development (OECD) warned this week that rampant optimism around AI has inflated equity prices, and that a crash in those valuations could drag down the broader U.S. economy.

What this means to you: If your startup or product roadmap bets heavily on AI hype, balance excitement with realism. Build for value, not just valuation.
Source: Axios

Startups
AI security and tooling startups lead the latest funding wave.
Despite economic jitters, U.S. holiday-season spending surged: online Black Friday and Cyber Monday spending hit roughly $24 billion over three days, above forecasts.

What this means to you: If you sell consumer-facing tools or services, this uptick shows there’s still a willingness to buy, especially if you position offers around value and timing (holiday, year-end). Ensure your funnel, checkout flow, and messaging are optimized to capture the surge.
Source: Reuters

Most companies chase new customers like oxygen. The strange part is that the best growth is already inside the building.

So much effort goes into landing new accounts, yet the most profitable revenue sits quietly with the people who already pay you. It’s the growth story hardly anyone wants to talk about, because it exposes a hard truth: if your existing customers aren’t expanding, your business is leaking potential.

This matters more than founders like to admit.

If your customer base shrinks, it doesn’t matter how loud your marketing is. If your customer base expands without adding new customers, you unlock the closest thing to compound interest in business. Investors obsess over companies that do this well for a reason. A business with strong expansion can grow during good seasons and survive during bad ones. A business without it becomes a treadmill.

So let’s dig into the part most companies skip.

Turning existing users into net new revenue isn’t about squeezing people for more money. It’s about asking the better question: are customers getting so much value from you that they naturally want more?

That question tells you everything about your product, your positioning, your pricing, and your future.

Consider a traditional marketing campaign: You spend weeks trying to acquire new customers. Cold outreach. Blog posts. Landing pages. The usual routine. Nothing moves.

Then, a longtime customer emails asking for help to automate a workflow. You quote a small add-on fee, they agree on the price, and then he tells two peers. That single customer pays for an entire quarter of operating costs.

Here’s how to think about it.

Upgrade paths work when customers hit real limits. Cross-sells work when customers trust you to solve adjacent problems. Usage-based growth works when your product becomes part of their daily or weekly workflow. Renewals work when customers see a clear return.

None of this happens by accident.

If you want growth from your existing base, you need to understand where they succeed and where they stall. You need to watch what they use and ignore. You need to notice which features create momentum and which create friction. These signals tell you what upgrades deserve to exist and which should be cut.

A simple place to start this week:

Identify five customers who get strong value from your product. Ask one question: “If we made your workflow easier or faster, what would you want next?”

You’ll hear the same themes come up. Those themes are the seeds of your expansion revenue.

Track one number: net revenue retention. If it’s below 100 percent, you have a leak. If it’s above 110 percent, you’re onto something.

If it pushes toward 120 percent, you’ve built a self-feeding engine.

This isn’t about being clever. It’s about being honest.

Your business already knows how to grow. Listen to the people who use it.

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Learn more.

Turn your happiest customers into your strongest growth channel.

Most teams hunt for new users while ignoring the people already getting real value from their product. That’s a mistake. Your best growth often lives inside your existing customer base.

Pick five power users and study what they do differently. Ask what they struggled with, what they hacked together, and what they wish they had next. Patterns will jump out. Those patterns are the roadmap to expansion revenue, better onboarding, clearer positioning, and products customers want to pay more for. Build around the needs of the users who already love you, and you’ll grow faster with fewer detours.