Stages of a Startup
All startups go through different stages as they grow. You start small, build a product, find customers, add to the product and, if you're successful, you eventually sell or go public.
​
I specialize in working with startups in the very early stages of growth. You'll find lots of different opinions on what, exactly, these stages are, but here is how I see them.
Philosophy of a Startup
Wait - there's a Philosophy of the Startup?
Sure!
Spend enough time at startups, some more successful than others, and, if you're paying attention, you get a feel for what works and, more importantly, what doesn't.
Startups go through stages, like many things in life. If you're a parent, or if you've been a child, this should sound familiar: you literally have to start with moving, then crawling, walking, talking, arguing, and, eventually, becoming a whole person. But, you have to do this in the right sequence: no driving lessons at age 3, and you probably don't want to be working on eating solid foods at age 17, either.
Startups work the same way: a few people assemble around an idea, plans are made, advisors consulted, software is written, prospects are contacted, sales are made, more software is written, and, if you're lucky, eventually the company is merged, sold, or goes public. There are struggles and arguments along the way and, most importantly for the end result, you have to do things in the right sequence.
Your company will continue to grow beyond what I've outlined below, but these are the areas I typically work in. I specfically focus on the Minimum Viable Product, First Customers, Expanding the Product, and Strong Customer Growth phases.
​
For more information on specific services and areas of expertise please click the buttons below.
Ideation
A few founders (typically 1-3) have an idea and decide that it's good enough to warrant starting a company. The early days are spent validating the concept, researching the market, creating a pitch deck, and determining the initial funding model. There may be a small amount of Angel investment or investment from the founders, but that's it.
​
The goal of this stage is to develop a clear idea of what the product will be, what problem it will solve, and who the target market is - at least at a high level. At this point the most important problem to solve should have been selected and there should be a clear idea of how the problem will be solved. All other potential features have been tabled (you took notes, right?).
Anything developed at this point tends to be either slideware or a very rough UI to demonstrate the concept. The goal of all work done is to validate the idea with early advisors and, if you're lucky, potential future customers.
Minimum Viable Product
Development of the Minimum Viable Product begins. This is typically the bare minimum solution that can be demonstrated to prospective investors and customers, and the goal is to be able to solve the most critical problem in the simplest way possible.
Work is done as quickly as possible and large portions of functionality ignored for the short term. One of the founders typically acts as the Account Executive / Sales Representative and another founder may well be the engineer. If Angel funding is available an additional software engineer may be hired at this point.
​
The end result is a very focused product that typically solves one problem for one customer. If done right, however, this problem is one that causes the customer great pain and the solution is good enough to dramatically reduce that pain. There will definitely be missing features and probably bugs, but these will be addressed in future releases.
First Customer(s)
Congratulations!!!
You have a customer (or, if you're really good, more than one)!
You've found one or more early adopters who are willing to a) pay you money for your product and b) accept that the product is currently limited. Typically, these customers are willing to work with you in return for a good price and a lot of input on what is being built.
More Angel funding has possibly been found at this point, another engineer hired, maybe an Account Executive, and the team is at 4 to 6 people. The founders are busy doing two things: finding more customers and looking for Series A investment.
​
Development is currently focused on fixing any bugs in the MVP and adding the most critical features identified by the first customers.
Expanding the Product
The Early Adopters have provided good feedback and proven that your product is viable and usable. Development work is now proceeding on the feature list and a development process has started to be implemented and documented.
​
You're now focusing on sales, working on marketing materials, thinking about HR, dealing with a few IT issues (managing 10 laptops is a surprising pain), tracking decisions made by the company, trying to figure out what needs to be built next, managing support calls, doing demos, talking to investors, etc.
Series A funding is either in hand or on the way soon. It's time to grow the team and start adding new features to the product. Assuming funding is available you're going to expand to 10-15 people and start preparing the structure of the company for future growth.
​
This is the point where it is very easy for a startup to get stuck in a tactical loop, making future growth more difficult. You need to continue to keep an eye on the overall strategy even while dealing with a myriad of day-to-day issues.
Strong Customer Growth
Customer count is now a two-digit number at least and you gaining traction in your chosen market. Your product is on a regular release cadence, product management is in place, you have at least one, and possibly two engineering teams, and various policies and procedures are being put in place to help with future growth.
​
Your Series A round of funding is providing a substantial portion of your operating funds, but sales to customers are also starting ot make a difference.
The team will continue to grow to 25 or 30 people and internal job descriptions, including those of the founders, are becoming more defined. The founders are focused first on increasing sales and then on the next round of funding.
​
The next step from here is more substantial growth to 50 or 100 team members and substantially larger revenue growth. Decisions made at this point will have a definite impact on how quickly you are able to grow in the future and how organized that growth will be.