The better you understand your startup’s lifecycle, the higher your odds for success. In this article, you’ll find the descriptions of the five essential startup stages.
The lifecycle of each startup consists of several stages. The better you understand which stage you’re currently at, the more rationally you can define your goals, build plans and measure your success. From this article, you’ll get to know about the main startup stages and their distinctive features. There might be different classifications of stages — but we’ll focus on the one that seems to be the most comprehensive.
Before launching a product, you should carry out research. One of the simplest and the most efficient approaches is known as the Keller one. It suggests that you should research the following aspects of your business idea:
You should thoroughly think of your strategy and risk management. You need to make sure that your whole team shares your vision. You might want to compile an image of your target customers and interview some experts.
When researching your competitors, you should find out what they fail to offer to their clients and fill that gap. For instance, they might offer a mobile app that is distributed only through one particular platform. Even though it might be a big and popular platform, you can target a large number of customers thanks to distributing a similar app through different channels.
Build an MVP
This acronym stands for “minimum viable product“. It’s not a full-fledged product yet but a set of features that enables you to test your offer with your target audience. It will take you considerably less time, funds and effort to build an MVP than a product. The essence of this stage boils down to the following: you have a hypothesis about your future offer and you need to validate it. Your goal is to gather maximum feedback to understand how your product impacts the audience and how you should improve it.
When building your MVP, you should stick to the following scheme:
- Define your timeline. The time frame of building your MVP depends on the level of complexity of your future offer and your industry. Some startups can get their MVPs ready in one week while others might need half a year.
- Make sure you have the right expertise. You can either hire an in-house team or outsource the specialists that you need. If your budget permits, it would be wise to hire a CTO responsible for MVP creation. For products that require dedicated tech expertise, hiring a CTO is a vital prerequisite for success.
- Ask questions. Some of your team members might proactively come up with useful ideas. Others would prefer you to formulate questions for them. To identify which question you should ask, you might conduct short surveys or run a series of user interviews to get refined feedback. All the ideas that you get should help you to deliver a better product, maximize the productivity of your workflows and boost your revenue.
Your MVP doesn’t need to save the world. It should be enough to offer to consumers a worthy solution to one practical issue.
To attract consumers’ attention to your product, you might want to focus on the following elements:
- Catchy branding. It should be easy for your target audience to recognize your product and differentiate it from all its competitors. To achieve this goal, you should give your product an identity.
- The more people get to know about your product, the better. Find out which channels of promotion are the most popular among your target audience and which ones they trust the most. Use these channels to inform your potential customers.
- Partnerships and referrals. People tend to trust recommendations more than ads. Look for experts and influencers who can help you to spread the word about your product.
At this stage, you’ll acquire your first customers — and they will be likely to remain your most loyal ones.
Introduce Final Improvements
By this stage, your number of customers should be growing steadily. By constantly gathering their feedback, you can get to know what they appreciate the most about your product and which of its aspects they would love to improve. You might want to do the following:
- Invest more in promoting your killer features
- Hire professionals that can help you refine the strongest sides of the brand
- Get rid of features that don’t convert
The ultimate goal of all these measures is to expand the value that stands behind your product as much as possible.
Aim for Maturity
The path to maturity includes the following steps:
- Look for partnerships that would enable you to boost your revenue. For instance, you can form partnerships with businesses whose goods and services complement yours, or with distribution channels.
- Introduce a system for ROI measurement. It’s not enough to see your revenue increase each month. You should identify the key metrics for your business that will allow you to assess your productivity and maintain positive trends in the future. There is nothing wrong with having over a dozen KPIs if each of them provides you with valuable insights. If your budget permits, you might want to install dedicated software for KPI tracking — this investment should quickly pay off.
- Attract funding. You might skip this step if you have a sufficient budget. Otherwise, you can consider traditional term loans or business lines of credit. Their terms will depend on your business history and current valuation. Plus, you might want to attract investors: apart from providing you with funds, they might be eager to share valuable advice.
When launching a startup, you shouldn’t expect immediate results. Typically, it should take you around three years to develop a mature business.
Hopefully, this article came in handy and now you better understand the stages of startup development. First, you do research and make sure you have the relevant expertise. Then, you build an MVP, get traction and start aiming for maturity. Discuss with your team which stage you’re currently at, single out your primary goals and challenges and try to make the most of your business!