What Is the S Curve in Business?

by Andrew Latham Google

The S curve, a mathematical model also known as the logistic curve, describes the growth of one variable in terms of another variable over time. S curves are found in fields from biology and physics to business and technology. In business, the S curve is used to describe, and sometimes predict, the performance of a company or a product over a period of time.

Anatomy of an S Curve

Systems, whether in business or embryology, that follow an S curve have the distinctive shape of a flattened S, although the slope of a steep mountain that plateaus at the summit is probably a more accurate description. S curves start with a modest and shallow growth, described by the mathematical term "the lower asymptote." Then the growth accelerates rapidly and the slope arches upwards until it reaches maximum growth. This point of maximum growth is the point of inflexion. After the point of inflexion the growth tapers down to its mature where there is little to no growth. This mature stage of the S curve is called the upper asymptote.

S Curves and Business



Technology businesses, such as computer, software and electronic manufacturers often display an S curve life cycle. One explanation for this, is that initial progress is slow because the principles of the technology are poorly understood. Once researchers get a better understanding of the technology, progress accelerates rapidly. However, as time goes by, the effort required to improve on the technology reaches such a level that increase slows down and the growth curve flattens out. Businesses and technologies with a well documented S curve growth cycle include automobiles, semiconductors, steam engines and disk drives.


It may seem surprising such a variety of phenomena and fields, from the growth in size of cows to the performance of hard disk manufacturers, follow a similar growth curve. The reason is they all are constrained by some kind of limiting factor. For instance, the population of a living organism is limited by the carrying capacity of its environment, while business growth is limited by the demand of its market or the financial viability of the products it sells.

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