In a world where it seems like everything has already been invented, unique ideas are worthless if you don’t hone them. So, no matter what idea you have for your startup, you have to cultivate it.
There are various approaches to growing a startup, including defining its development by lifecycle stages.
We’ll explore the five startup stages that you and your company will likely go through—it’s a relatively straightforward way to go from a promising idea to an established company.
Related: How Startup Equity Works
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The Startup Journey: From Idea to Growth
A successful startup means taking a journey from idea to growth; you need to know the path your company will be walking. The overall goal of these five stages is to take your startup idea through each one, resulting in an established enterprise in the future.
They’ll help you:
- Take your idea to create an MVP
- Initiate scaling processes
- Make MVP improvements to build a finalized product
- Build a base for profitability and expansion
Here’s Every Startup Stage Explained Step-by-Step
1. Beginning the Research
During the first startup stage, you should focus on strategy, risk management, and fostering a clear vision that the entire team shares. Whether you’re new to startups or an experienced entrepreneur, you don’t want to let your passion make you rush in without a plan.
There are two key steps to consider during the research stage:
Create a Research Plan
Entrepreneur frequently talks about the Keller approach to researching for a startup, suggesting that you move in four directions: company, customer, competitor, and collaborators.
Your plan should describe what you need to achieve before you start working on a minimum viable product (MVP). You’ll likely want:
- A list of experts to interview
- An idea of who your target customers are
- Research your potential competitors
Fill in the Gaps
Examine what your competitors offer—then focus on what they don’t. There are always gaps, no matter how successful a business or how crowded a market is; find out what’s missing that could be valuable to your target audience.
2. Going From Idea to MVP
Once you decide on a product, it’s time to validate it. Your MVP is a product with must-have features that you can distribute to your target audience for testing. MVPs don’t require sophisticated engineering—the goal is minimum effort for maximum feedback.
When creating your MVP, there are three basic steps to follow:
Define a Timeline
There’s no defined amount of time that a startup should spend building their MVP. Some companies might have it finished in a week, while others need months or years. Plan a timeline based on the size of your team, budget, and specific features you need. Other than coding, you’ll also want to plan for time to measure results and make changes based on the feedback you receive.
Related: Startup Sales & Marketing Expenses
Get the Right Partner
Most startups have a tight budget when starting out—however, remember that a startup without an MVP likely won’t do well. Hiring an in-house dev team is expensive, but you can always outsource your MVP, and once it’s validated, continue working with that partner or start recruiting a team.
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Instead of waiting for people to give you feedback and ideas, ask them questions. You can run some user interviews or conduct short surveys to get more refined feedback. The ideas you get from this feedback will help you further develop your final product.
3. Gaining More Traction
The third startup stage is where things really start to happen—you’ll get your first customers who will (hopefully) become loyal followers. Now, you need to focus on growing your customer base and continue collecting feedback.
We’ll leave you with three tips to think about while your startup is gaining traction:
- Make your branding catchy. Your product should have a unique identity that allows all of your target audiences to easily recognize it.
- Run promotions. To get more customers, your product needs to get in front of more people. Pick different channels to run promotions on, depending on where your target customers are most likely to look for you.
- Look for partners and referrals. Search for people who can help get the word out about your startup and product. People trust people more than ads; getting referrals from real users can make this approach more successful.
4. Making Final Improvements
If everything has gone smoothly during the previous stages, you should be getting more customers now. Keep talking to them. Get more feedback. Understand why they love your product. Leverage that information.
It’s time to expand the value that your product brings as much as possible. At this point, the most common scenarios for making final improvements include:
- Get rid of any features that don’t convert.
- Hire a team to refine the strong points of your brand.
- Invest in promoting your product’s defining features.
Aiming for Maturity
Now, it’s time to go from startup to maturity. You’ll have to take some bold actions. However, even with the best growth hacks, success doesn’t happen overnight. On average, it takes a startup three years to become an established business—no bypassing, no tricks, no instant results.
To reach maturity, your startup needs to focus on making life better for your customers by:
- Researching partnerships to grow your revenue: Take Airbnb for example; a year after launching, the company migrated to AWS. That decision helped them slash their operational expenses while benefiting from Amazon’s integrations. See what partnerships you can make to start growing the revenue of your startup.
- Measuring ROI efficiently: During your startup development, you’ll hopefully see significant revenue growth. You need instruments in place to measure your success to maintain positive trends in the future. Find ways to measure revenue and collect metrics from all over your company.
- Attracting more funding: You’ll need plenty of resources to grow from startup to established—start focusing on external funding. Depending on your current valuation and business history, you might want to try attracting new investors or considering traditional loans or business lines of credit.