Everything starts with an idea, the fire-in-the-belly that kicks you into action and guides you towards your goal. Here is a summary of the start-up lifecycle.
As your start-up journey begins you will inch your way through the start-up lifecycle and knowing what stage you are at will help you to focus on the right things.
To help you on this journey, here is a summary of the start-up lifecycle and what you need to focus on during each stage.
Stage 1: Idea
An idea is never complete or still. It is in a constant state of flux. In start-ups, we establish a hypothesis about something that might be valuable and then we test different versions of it until we can see and measure the value.
But not all ideas have the ability to make millions so how do you know if your idea has potential? Here are some things to think about:
- Are you solving a problem or a real pain point for a specific group of customers that you can articulate?
- Dream big, but start small and know what you are focusing on during every iteration.
- Become unattached to your idea.
- Get ready to test your idea.
- Stop analysing the idea and start building on it.
- It takes more effort to sell an idea than it does to create one.
You will need to become completely unattached to your idea and instead be realistic and flexible. Always remain tenacious and driven with a passionate belief that your idea, product, or service can make a difference.
Remember, nine times out of 10, you’re wrong the first time round. The idea you start with isn’t usually the idea you will end up with.
In this stage there are several things you really need to focus on to ensure your idea gains that potential. To keep you on the right track ensure:
- Your idea solves a problem.
- Your idea delivers significant value.
- No one else is doing it already or that you can do it better.
Stage 2: Discovery
In this phase, start-ups discover the core of the business. Before moving onto the next stage, you must be able to measure that you have a clear solution to a specific problem.
During this stage you will discover:
- The goal is to create fantastic products that customers love and keep on loving. You will discover this through a culture of testing that is critical at the start but never loses importance.
- Testing a business is about flexibility, not scalability at the start.
- Build a minimum viable product (MVP) and see how people respond to something they can touch.
- It’s a first product not a perfect product. Release today and start measuring.
The best formula to focus on for this stage is: Build > test > measure > learn. Repeat. Founders that learn are more successful. Make sure you have tough skin and are ready to learn.
Stage 3: Validation
In this phase, an actual product is tested with actual customers to find product/market fit.
Essentially this stage will help you to:
- Get early validation that people are interested in exchanging their money or time and attention on the product.
- Evaluate the efficiency with which customers can be captured and kept.
Developing customer relationships and refining your product or service as you go, hunt down the value for customers and is the fastest route to traction. Rapid iteration allows you to experiment, test and pivot more quickly, dropping ideas that don’t work, and focusing on the ones that do.
Although hearing ‘No’ is discouraging, setbacks are bound to happen. If you keep preserving, these setbacks will show you just how bad you want this vision or idea to succeed.
Stage 4: Efficiency
Once your business is validated you move into the efficiency stage.
Something to remember is never to skip this stage and move straight into Stage five which is scaling, as scaling prematurely can be disastrous.
At best, the company is weak and does not make as much money as it could. At worst, it can’t cope with the burden of growth and collapses. Don’t scale until you are ready.
Instead first focus on:
- Improving the customer acquisition process.
- Minimising customer acquisition cost and maximising conversion rates.
- Automating as much of your manual processes as possible.
Once you’ve worked on and perfected the above ten, and only then, should you move into the very last stage of the startup lifecycle.
Stage 5: Scale
If you are ready you can show, with evidence, that investment capital can fuel a growth engine at the heart of your business. You should not be scaling if you are still making gut decisions on strategy and likely next steps.
If you’ve reached the scaling stage firstly stop, take a step back and really think about your business. Scale is the step that many entrepreneurs jump into far too early, which is a dangerous and often fatal move.
To scale is to put the foot on the accelerator and drive growth aggressively, with confidence that the resources you invest in the start-up will pay-off with measurable results. So are you ready?
In the end it’s that grand vision that’s going to keep you motivated. Remember – it’s not what happens to you that will determine if you succeed. It’s what you decide to do next that does.