101 Startup Stages
Yes - Every startup’s journey is different!
Even though this is the case, most startups will go through roughly the same general stages while developing and growing and these are referred to as the stages of a startup or the startup life cycle.
Well, ok, you most probably have heard it all: The startup life cycle has 6 stages, no wait 5, no, another website said… 7 stages and then if you actually read The Lean Startup by Eric Ries then you will have read that there are 3 startup stages.
Let’s face it, it doesn’t really matter how many stages there are, as long as you understand the steps involved you will be able to figure out where you are at and what the next steps on your growth path are.
This can be really helpful when working on your business plan!
Idea Stage
This is when your ‘baby’ is born.
Maybe you had a problem and found a solution, maybe you were just receptive to the many ideas that float into the air… and now you are seriously committed to making this into a business.
This is where everything starts, but also where most stop… Remember, the key is in the execution!
Development Stage: Problem/ Solution Fit
Right now you should fully focus on testing your assumption that your idea is great. Most of the time, entrepreneurs start testing the enthusiasm/demand for their business solution by having conversations and surveys with as many people as possible, social media sites, demos, and many more.
All this feedback is what you need in order to improve your idea and adjust the concept to make sure that it will work.
The goal is to create an MVP (minimum viable product), a version of the product that has enough features to be usable by first customers who are then able to provide you with feedback for future product development.
Development Stage: Product/ Market Fit
During this stage you are validating your business and product.
You want to make sure that you have successfully identified your target customer and that your product’s value proposition satisfies their needs.
Understanding product/market fit includes an in-depth understanding of who your customers are and what they think about you and your product rather than theoretical numbers.
Would your customers recommend your business and your product? Are the willing to pay for it?
If your customers are recommending you via word-of-mouth and you are achieving sales through organic growth, then your product is what the market is looking for and you are likely to have found your product/market fit.
Scale Up Stage
As soon as you achieve Product/ Market Fit you are able to focus on the growth of your venture. You will now focus on building a marketing engine to scale your user acquisition.
But watch it: Startups commonly want to grow as soon and quickly as possible and sometimes they try too early to scale when they are not ready. This can lead to problems with the brand image, burnout and customer dissatisfaction.
The right time to scale is a balancing act:
- Did your channels hit a saturation point?
- Do you have resources and experts in place to expand the channels?
- Do you have enough capital to help you out?
Make sure you are ready before you push!
Also, keep in mind that getting bigger, means that you will tackle bigger markets and your direct competitors will be bigger and more established. Make sure that you are aware of what is happening in the market and that you can handle it.
Maturity Stage
- Good position in the market, check!
- Solid customer retention, check!
- Influence on your industry, check!
- Returning a profit, check! check! check!
Well done! You are most likely approaching maturity.
Depending on your personal ambition and exit strategy, this is the point where you might think about international expansion, growth through an acquisition, selling your business or about listing on a public market and an IPO (Initial public offering) – if you are thinking big.
Or how about a very well deserved holiday, re-establishing your work-life balance or, if you got the kick out of it, creating another startup 😄
An entrepreneur’s journey is long and it is easy to lose track in between, so we hope that understanding the different startup stages might help you stay motivated and focused when you need a reminder about what is next.
In the future, we will speak about different funding stages (I’m sure you’ve already heard about pre-seed, seed, series A, etc etc) that loosely correspond to these Startup Stages, but not quite…
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