The 11 Inflection Points that Must Be on Every Leader's Radar
The sooner you can see when your business is at an inflection point, the better your odds of pulling ahead of your industry.
This is Part II in a six-part series about why inflection points are critical moments in the growth of your business. You can read Part I here.
Here’s what we covered last week:
• Inflection points define your next chapter. They’re critical moments that require your business to evolve.
• Inflection points happen to every business. They can come from external forces (like tech shifts, regulations, market changes) or from within.
• They’re neither good nor bad, just inevitable. Great companies face inflection points as often as terrible ones do.
• Intel and NVIDIA show why your response matters. Both faced the same market shift, but one stuck to the past while the other leaned in.
• You have three choices. You can avoid thinking about your next move, examine it and move slowly, or decide where to go and act boldly.
Inflection points always present your business with the same core question: “What must our business become to win our next chapter?”
The sooner you can answer that, the better your odds of using inflection points as opportunities to pull ahead of everyone else. Ideally, while others are still getting their bearings, you’ve already decided where to go next.
But that can’t happen unless you recognize inflection points as they are happening. Or even better, before they happen.
So today, here’s a complete list of inflection points.
Think of this as a mental checklist you can review when something starts to feel different in the business. If one of these scenarios is happening to you, you might be at an inflection point yourself.
The sooner you can see what your business must become to win its next chapter, the better your odds of pulling ahead of everyone else.
First up are external inflection points: the situations that happen to you (and often your competitors). They can require your entire industry to adapt.
External Inflection Points Can Affect Your Entire Category
1. Technology waves force an industry-wide shift
Example: AI
Right now, nearly every business must consider how it will adapt in the age of AI. The smart ones aren’t just slapping “AI-powered” on their products; they are rethinking what business they’re really in. And they are resetting the dynamics of their category along the way (if not creating entirely new categories). Similar industry resets happened with the internet, mobile, and cloud computing.
2. Competitor moves block or hamper your strategy
Example: Amazon’s third-party resellers
E-commerce sellers used to enjoy a pretty even playing field. Amazon wasn’t even a competitor, unless you sold books or music. But as Amazon opened its platform to third parties, it rewired the way e-commerce worked. Merchants selling through their own websites soon found themselves competing with thousands of sellers using Amazon’s platform. To survive, they had to rethink how they could add value in ways Amazon couldn’t.
3. Laws and regulations change the landscape
Example: telehealth regulations
Before COVID, telehealth and remote care businesses were highly regulated, and patients weren’t eligible for reimbursements like they were with other medical services. That kept the industry small. But in 2020, those regulations were relaxed. The market opened substantially, allowing startups to become major players and creating a large enough category for established providers to participate, too.
4. Cultural attitudes and behaviors shift
Example: waning interest in EVs
Not that long ago, it was fashionable to criticize gas guzzlers for their contribution to global warming. The Toyota Prius and later Tesla enjoyed a surge in popularity as a result. And more than one carmaker pledged to go “fully EV” in just a few years. Today? EVs have lost their luster for many buyers, even though they work just fine. GM even abandoned plans for a $300 million EV motor factory and intends to build a new $888M factory that will make V8s instead.
5. Geopolitics closes some doors and opens new ones
Example: trade tensions with China
In response to a tense relationship with China, the U.S. made it more difficult to manufacture and source high-tech products from its rival (such as semiconductors) and created incentives for those products to be made domestically. For some businesses, these changes are creating opportunities that didn’t make economic sense in the recent past (like this one).
6. Market forces change supply and demand
Example: housing affordability
Housing prices have remained stubbornly high in the U.S., even while mortgage rates have risen. Since wages haven’t kept pace, this has created a huge drop in mortgage demand for first-time homebuyers. Brands like RocketMortgage, which relied heavily on this market, have had to shift to other financial service products in order to stay relevant.
Next up are internal inflection points, the new chapter markers that happen because of decisions you made inside the business.
Internal Inflection Points
7. M&A sets you on a new direction
Example: Google Cloud and Wiz
Google Cloud is a mainstay in cloud computing, and Wiz is a cloud-agnostic cloud security platform that works with all of Google Cloud’s major competitors. In 2024, Google announced plans to acquire Wiz. If the deal goes through, it will reshape both businesses. Google will gain a new set of competitors, while Wiz will have to balance its cloud-agnostic cred with being owned by a cloud giant.
8. New investment means playing at a new level
Example: PayPal’s IPO
When PayPal was spun off from eBay in 2015 and became a public company, it gained the capital and autonomy to lean into a much more ambitious foray into financial services. It would no longer be merely a convenient way for eBay’s customers to buy and sell; it would become a huge player in financial services, eventually offering everything from Venmo to POS and credit products.
9. A change in leadership brings a new agenda
Example: Satya Nadella replaced Steve Ballmer
When Satya Nadella took over Microsoft, he wasn’t there to pick up where Steve Ballmer left off. He put the company on a whole new path. Under Ballmer, Microsoft was focused on selling the Windows operating system and office productivity tools, primarily to enterprises. But Nadella’s agenda took the company into cloud computing and AI. Now it’s a powerhouse in both.
10. Your offering (and the problem you solve) expands
Example: Notion moved from a point solution to a platform
Notion began as a wiki-like tool for organizing content, like text and tables. But over time, it became something else. First, it added integrations, then a calendar tool, email, and, more recently, meeting notes and AI. I’m not sure what it is now, to be honest. But it’s certainly a different beast than a few years ago.
11. GTM changes mean new channels and customers
Example: HubSpot’s international expansion
HubSpot initially sold its software to SMBs in the United States. But after a decade in business, it expanded to EMEA, APAC, and LATAM. This shift in GTM meant relying on channel partners instead of direct sales, and having to compete against regional players that didn’t have much of a presence in the U.S.
What Executives Miss about Inflection Points
If you’re a CMO or CEO, you’re already on the front end of dealing with any inflection points that you encounter. For you, the implications will be acute. But that’s where the danger lies.
The risk is that your team will take too long, and spend too much energy, trying to recalibrate, leaving you behind and with little room to maneuver.
For your team, it may not be obvious how they should respond to the new direction. Even if they know about a pending M&A or that big move from a competitor, it won’t be clear what to do about it. Marketing may send the wrong message, sales could be out of tune, or the product may not know where to head.
The risk isn’t that you don’t figure things out. The risk is that your team will take too long, and spend too much energy, trying to recalibrate.
Best case, there’s the opportunity cost of spending too many quarters moving sideways instead of moving forward. Worst case, competitors are able to react faster, leaving you behind and with little room to maneuver.
That’s why recognizing inflection points is just part of the picture. What’s just as important is re-aligning your team on what to do about them.
Next week, that’s exactly what we’ll cover.
As the founder of Flag & Frontier, John Rougeux partners with executive teams to align on their strategic narrative, build belief in the market, and win the next chapter of their business. You can chat with John here or connect with him on LinkedIn.