What is a hockey stick chart?

The shape and what it claims

The hockey stick claims that a business spent time figuring something out and has now found it. The flat shaft is the search; the blade is what happens once the product fits a market and a repeatable way of reaching customers works. Paul Graham's essay Startup = Growth describes the same pattern in three phases: a slow period while a startup works out what it is doing, a period of rapid growth, and a slowing as it matures, which together produce an S curve. The ascent is the phase that defines a startup, and its slope is the growth rate, the one number Graham says every founder should always know.

Why investors doubt it

The doubt is not about the shape but about how often it is drawn without cause. A spreadsheet that grows a figure by a fixed percentage every month produces a hockey stick automatically. Andrew Chen, a growth investor, calls this the most common mistake in product growth forecasts: curves that all look the same, smooth and unadulterated, as if traction appears out of nowhere. Real growth arrives in steps, as one channel saturates and another takes over. Graham's essay also warns against manufactured growth, such as buying users for more than they are worth, because it misleads the founder as much as the investor. Y Combinator's seed deck template makes a gentler point beside its example chart: your curve is unlikely to be this smooth, and that is fine.

How to make the curve credible

Plot the history, not only the forecast, and draw a visible line where actual results end. Name what causes the bend and show the early evidence for it, such as a new channel whose first month already beat the old one. Put retention next to growth, because new customers only compound if existing ones stay. Report a consistent growth rate over a period rather than the best month. For forecasts, show more than one scenario, each with the assumption that drives it written on the slide. A reader who can see why the line bends will argue about the assumption, which is a far better conversation than disbelieving the chart.

Common mistakes

The first is starting the forecast bend exactly when the round closes, which reads as the money doing the work rather than the business. The second is a cumulative chart, which always rises and hides a shrinking monthly number. The third is a logarithmic axis without saying so. The fourth is unlabelled axes or missing units. The fifth is the smoothness itself: a curve with no dips at all looks modelled, while a real curve with one bad quarter explained on the slide builds more trust than a perfect line.

Charts that show growth honestly

A bar chart of monthly or quarterly revenue shows each period's own result, so a slowdown is visible rather than buried in a running total. A line chart works for longer series. Two series together, such as new revenue against churned revenue, tell a truer story than one. Whatever the chart, one sentence above it should state what the reader is meant to see, such as twelve consecutive months above ten percent growth.

Where it shows up in the product

The Series B deck example on this site puts eight quarters of recurring revenue on one chart with the growth rate stated in the subtitle, follows it with a cohort retention table, and later shows three forecast paths with base, plan and upside endpoints named beside the chart. Charts here come in 10 kinds, including bar, line, area and column stacked, and a chart added from the element library can switch between all of them. The generator fills in figures when a brief has none, so give it your real series and check the chart against your records. In the editable PowerPoint export, 9 of the 10 chart kinds become native PowerPoint charts with their data attached, so an investor's analyst can read the underlying figures.

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