6 stages to create a successful startup
If you are interested in this article, you must bear the idea of your own startup or you have already started to its fulfillment.
We offer you to get acquainted with simple and effective tool “Startup Development Phases” by StartupCommons that actually became a benchmark at startup environment. According to this concept, the startup goes through 6 development phases that can be grouped into 3 main stages such as Formation, Validation and Growth. For each startup is vital to realize on which phase it is and make right steps respectively to current startup phase.
On this phase the idea is created and polished. Also it is important to analyze a target market. There is no need in team and any other resources in this stage. Considerable attention is paid to discovering the market and gathering the data about potential clients. In the end, simplified business plan is created in which key directions of further work are determined.
The most important that you should know on this stage is who is going to pay for your product or service and why? In order to define the need of your product more precisely, the startup should answer the following question – what will people stop doing or using if they choose your product.
The next step after an initial phase of the idea validation and analysis of the market is forming a team of key people with whom you want to continue your startup travel and also the development of the startup strategy for next years.
Many startuppers, especially, if they are programmers, don’t want to share their ideas till the time they receive investment. But is it a right decision? In this case the startup will complete many unspecialized issues and it significantly detains the product development. The startup doesn’t have the opportunity to hire high quality specialists that is why definition of key partners and engagement them in collective work over the idea is almost the most important task on this stage.
Herewith, during the conception stage it is necessary to formulate startup mission, draft the startup financial plan with anticipated indicators of costs and incomes on 2-3 years and also to define key milestones of launching the startup.
During this phase co-founders agree on their shares in the startup, the roles that each will fulfill, the conditions of leaving the startup and, in fact, than begin to develop the product.
For the start-up final version launching usually quite a lot of time is needed. During this period of time the market situation can change significantly. The best solution in this case will be to create an MVP of product that will allow you to check the effectiveness of the business idea at an early stage.
MVP (Minimal Viable Product) is a development method that creates a primary version of a product with a minimal set of core functions that can meet the basic needs of customers. After feedback from the first users of the product and their analysis, they start to develop the product fully.
MVP is one of the most important stages of any startup launching. It not only allows you to test the idea of the startup, but if necessary, make changes to it. At this stage, you can start implementing a variety of marketing steps to attract investors.
At this phase, there is validation or "finishing the concept". Founders should proof the value of their ideas to all stakeholders - employees, clients, real and potential investors. Preferably, at this phase the future fate of the startup is determined.
It is very important for the product and at the same time quite exciting for founders who, on the one hand, are trying to develop the successful strategy for their brand promotion in order to attract investors, and on the other - should show the first successful results to prove the benefit of their product to customers.
Usually, during the validation stage, a change in the business model of the startup (pivot) may take place if the initial business model didn’t fulfill expectations.
The scaling phase occurs when the startup receives serious investment (round A), showing the viability of its business model.
At this stage, intensive recruitment of staff, marketing activities at target markets and active engagement in PR to increase the number of users, customers, income and market share take place.
At the same time, at the scaling phase, the startup provides comprehensive analytics, improves the quality of customer service and optimizes business processes.
If the startup has experienced significant growth and reached a critical user mass, then it passes at the establishing phase. The startup shows a positive income growth, so it's easy to find new funding and new people.
The founders are looking for variety of ways to develop the startup from a purchase of smaller companies, launching of their product to other markets and to investment increase etc. At the same time, the founders are often trying to maintain the spirit and culture of a startup.