From Idea to Scaleup: Startup Stages
As we entrepreneurs, we’re all about the journey. From the very first moment that startups have the million-dollar idea to achieving the billion-dollar company success, entrepreneurs enjoy the ride all along the way. But there are some milestones to pay attention to keep yourselves on track and run things on schedule at your startup.
I know, it sounds very nice — billion-dollar company and all that. But the journey has serious challenges at every step of the way. Expert entrepreneurs divided these challenges and put them into the few stages according to their similarities and potential occurrence time. We call them Startup Growth Stages. Entrepreneurs from different ecosystems have different opinions about this diversification. In this blog, you will find simplified and generally accepted startup development stages.
Idea
The idea stage is the very beginning of our journey. Every idea starts with the spark of a problem. In idea, you need to define customers’ “pains” and make the solution idea the perfect painkiller for your customer segments. Studying the urgent needs of customers, alternative solutions, and how customers relate themselves to the problem are key factors of this stage. At the end of the idea stage, we have the first drafts of our product ready for production.
The idea stage is crucial because by skipping this stage you may be spending resources for production that no one wants to pay for.
Prototype
A prototype is the initial model of an object built to test the design of your product. It is not anything like an MVP however operating some modules in it. Prototypes can be prepared on paper like sketches or digital designs or workflows. With sufficient prototype, customers can see the potential experience of your early work and see if it is a real solution to them. This stage can be repeated multiple times according to the feedback the startup receives from their potential customers.
Minimum Viable Product (MVP)
Congrats, your product has taken its first steps so far! MVP is a version of a product with enough features to serve early customers and provide feedback for future development. It is the final chapter before you fully commit yourself to your startup. Feedback for your MVP shapes your product and prevents you from wasting your resources for engineering unnecessary features or modules in your product and accelerate your teams’ learning curve in customer and product development.
Early-Stage
Defining the term “Early Stage” is kind of challenging. Basically, it covers all the stages from idea to first funding. I’m taking the second opinion here and introducing to you Emma Mcgowan, who is writing about entrepreneurship. She defines early stage as “Depending on who you’re asking, “early stage” can include everything from the first email a founder sends after having a great idea to only companies that haven’t raised money yet to everything up to a Series A.” In our alignment, it is used for startups with a simple amount of customers who are near the end of the design and production processes and are preparing to transition to the growth phase.
Growth
This is the point where things get serious. Previous stages are a great opportunity for learning new things and trial and error. But in the growth stage, founders specialize their teams and turn the main drive only to grow their companies. “Teams grow, ambitions grow, the stakes are higher, forecasts are more aggressive, investor expectations are higher, and the pressure gets heavier,” says Donté Ledbetter about this stage. The product should be ready for the market and the team should reach product-market fit as high as possible with their customer segments and value propositions.
Startups should gather all the kinetic energy they can get before they take the step into the Scale-up.
Scaleup
On the first light of the fifth day, at dawn, if your company can survive, Scaleup is coming through the dawn. Scaleup means that a company that has already validated its product within the marketplace and has proven that the unit economics are sustainable, says Rocketspace.
A considerable amount of experts separates startups with scaleups. It is like a whole other period for startups. Scaleups know their market and their customers’ behaviors. It means they know where to put money in business and get how much X$ in return. That level of clarity allows them to confidently divert more funds into doing what they are already doing on an even bigger scale.
Few Notes About the Journey
Most of the startups go through these stages with this order. But there are a few points that we have to remind you. According to your local ecosystem, industry of your work, team structure/past, or global trends these stages can take longer than you expect. Rough feedback from your customers might make you repeat or take a few steps back in these stages. In a positive look, you might skip some stages in a surprisingly short amount of time despite your competitors.
The ideal way is to keep a checklist in every stage and not to miss any details. Failures should not get the best of us and accomplishments should not take our eyes off the road.
Furkan Karaşahin
Angel Effect Team
