When you’re at the helm of a startup, it can seem that you’re on a choppy sea and navigating just what’s directly in front of you. But taking a wider view, and understanding that all businesses go through stages, helps you understand where you are – and where you want to be.
We have identified six key stages of development for startups. They are:
- Maturity and exit
So let’s jump in and get things moving.
Stage 1. Ideation
This stage is marked by creative thinking. It’s when you are looking at the market, when you are thinking deeply about your own experiences and frustrations, and trying to identify a need that is not being serviced, a customer problem that is not being addressed.
This is where you are going to add value, and this is where your offering lies. But it must be the point at which a unique solution intersects with your own passions and your personal strengths. You will need this in order to sustain over the long haul.
Now, think about where you are. Is the location, the business environment that you’re in, lending itself to your idea? Is it a place where your idea can grow? What has your market research and competition analysis told you? And beyond market demand, is it fertile ground for finding mentors, for future recruitment, and does it have the necessary infrastructure?
As a final point, consider why you are doing this. What is your goal and how will you know when it has been achieved? Are you doing this for money or is there some larger purpose at play? There is no wrong answer here, but it’s good to have it clear in your mind before starting your journey.
Stage 2. Validation
This stage is about invention and getting to the point where you can build your minimum viable product.
Following your market research in Point 1, it’s here that you test that market. Is there a genuine need for what you are offering, or are you locked into the idea of ‘what you think is needed’? Ensure you properly test the market before launching.
One trait of new business owners is the fear of your idea being stolen. This is highly unlikely and is far outweighed by the value you will get from sharing your idea with your mentors and peers. You need a lot of opinions, so think big. Can you get 100 different people to give you feedback? Then collate it, look for patterns, and adjust accordingly.
We have already talked about the level of enthusiasm that is needed for the new business owner. But that doesn’t mean you simply don’t think about what could go wrong. So, planning for problems, looking in detail at potential bad scenarios means you’re better able to survive them should they occur.
Your business plan should cover a wide range of key points, not least how you will structure your business, how you will recruit and manage your team, but also looking at projected revenue, costs, and profits. Doing proper financial projections, which can always be altered as you go, will give you a solid baseline from which to work.
Aside from the people you have been garnering feedback from, the idea until this point has very much been a private thing. Now is the time to share your offering. So this stage is a ‘tell the world’ stage – that means connecting with potential clients, building relationships and partnerships, and growing your network. These are the people who are going to be useful, perhaps critical, to your company in the years that follow.
In short, this is where you introduce yourself to the industry. Some of this will be face-to-face meetings, but social media will be a vital, and relatively cheap, way of reaching people. Overall, think of this stage as turning your business around so you are now outward-looking.
We have talked about the market in its wider sense, but here is where you get very focused on individual customers. That means listening to their needs and working hard on customer acquisition.
Your business is, at this point, starting to gain some momentum. But given the research you have done in Point 3, it’s also time to adapt, to ensure your offering is optimised and fully aligned with customer needs.
It’s time to really get aggressive in your approach – boost your marketing and sales budget and make a push to get your business past the starting line and deep into the race. And while doing this, it’s important to remember to ensure you are remaining compliant – whether that’s local laws, regulations, as well as your tax obligations.
Referring back to the business plan we covered earlier, here is where you start to build that strong, focused team that will help you scale. You already know who the best people are in the industry from your earlier research, so the compromise here is to get the best possible people – who are within your budget. But beyond just talent, it’s about a culture fit. Don’t underestimate its importance.
You set out your goals early on, and so here you are constantly measuring everything – your targets, your KPIs. Are you getting the kind of numbers you expected or do you need to adjust something, whether that’s the goal itself, or some aspect of your business processes that is not allowing you to reach the goal?
Thinking growth also means you may consider acquiring a company in your industry, or vertically integrating with a company that forms part of your supply chain. As you grow, and diversify your offering, you are able then to cross-sell and upsell your products, and boost revenue.
Finally, it always comes back to relationships. Yes, you’re in a growth period, but being good to those you interact with – employees, partners, customers, and so on – will always come back to you in some positive form.
6. Maturity and exit
So, what’s next? It didn’t seem long ago when your business idea was just a few notes on a screen or a piece of paper. But at this point, it’s time for you to move on.
Hopefully everything you have put in place up will help take care of the business into the future, with someone else at the helm. The key thing is you have hired good people who you have taken good care of. And you have continually looked ahead, and put in place what is needed to deal with any potential crises that may be looming on the horizon.
Now the question is, what’s your next project?