The thin line between survival and failure as a startup is not in the funding or the awesomeness of the startup idea. (Since you already got here, I’d gladly share) The difference is in the understanding of the process; The Startup Lifecycle.
Bear in mind that there are numerous frameworks and processes, but they only stand for as long as it takes life to happen. So, it’s important to understand the traits of the stages in the lifecycle. While the stages may vary in your startup’s story, identify the major features. That way, you are better in charge of the flow when life happens.
“The most successful founders focus on the needs of their startups at every stage of the startup lifecycle.” – Tweet this
That said, let’s explore the four (4) stages of the startup lifecycle.
Inception Stage: Latent energy stage of the startup lifecycle
Every startup begins with questions (a crazy lot); the ones it asks, and the ones it answers.
What is the problem?
Are there any current solutions? Or makeshifts?
What is my solution? And so on.
What I’d call the inception stage (feel free to change that, but always recognize its traits) is the first stage of every startup’s lifecycle, the stage it gathers all the latent energy it would need for its lifecycle.
This stage of the lifecycle comprises of ideation, conceptualization, and MVP development. I can’t overemphasize how crucial every component of this stage is to the overall performance of the startup (whether or not it would make it to next the platform)
Like you, every founder or team develops the idea for the startup in this phase. The reason for embarking on the entire startup process would be this idea. Yet, your startup would have to pass a few market tests and possible tweaking to stand out.
I’ve been part of several ideation sessions in the past (also, was involved in one quite recently), and here’s what I’ve found.
“We cherish our ideas a lot, much so that we hardly ever want to iterate them. Unavoidably, feedback always makes sure we do.” – Tweet this
Also, always remember that it’s at this stage that you answer the most crucial question.
Why are you doing this?
It is vital to understand the difference between this element and ideation. During conceptualization, you develop the how-to of your startup idea. So, your idea is the What, and your concept is the How.
Importantly, at this stage, you would want to involve a consultant who understands the market, what has worked in the past and can help you tweak your concept to fit that market.
Ideally, at this point, you could be spending a lot of funds (that you don’t have), but it saves you more in the future.
3. MVP development
The materialization of a model of your startup idea is essential at this point. An MVP (minimum viable product) becomes necessary to test the actuality of your hypothesis.
An MVP is not a complete or finished product but the basic working model of your product that can show the viability of your idea and its potential to deliver the proposed value.
Getting users to try out your MVP and give active feedback would be the goal here. With the responses earned, you can successfully make iterations and develop on the design without losing substance.
Perception Stage: Rate-limiting stage of the startup lifecycle
The good news here is that most ideas make it to this stage. The perception stage begins with financing, authentication, and finally pre-launch.
You know what they say about opportunities and how they come just once? Well, I think they are always presenting themselves, but only the prepared grab them.
This stage of the lifecycle involves developing exquisite pitch decks that would communicate your startup’s market and investment-worthiness to potential VCs and Angel investors.
The key to survival here is understanding what prospecting investors want, positioning your idea for it, and presenting an easy market.
Validation is a vital process that your startup must go through and must pass before launch.
Bear in mind that the validation process requires the involvement of all entities, the team, your investors, and representatives of your target market, to stress-test your business model, the product, and strategies.
The idea is to find the loopholes and straighten them out before pre-launch, more like a litmus test for your product’s market-readiness.
“The validation phase is the likeliest rate-limiting phase of the startup lifecycle. It stress-tests the entire process for flaws and resolves them.” – Tweet this
The pre-launch phase is the introduction of a beta model of your product or services. The idea is to get a lot of your target users to test out the product or service for feedback to improve on the final model.
Ideally, this is the validation process carried out by the representatives of your target users (beta-testers). This stage demands consistent branding and communication of the brand’s value proposition.
Pre-launch marks the end of the perception stage and begins preparation for the next stage of the startup lifecycle.
Acceleration Stage: Exponential growth stage of the startup lifecycle
The acceleration stage starts when the startup makes it through pre-launch successfully.
At this stage, your startup’s product is market-ready and launches. Consequently, early adopters and beta-testers are mostly the first users of the product after launch.
It’s worthy of note that this stage would involve a lot of aggressive and interactive marketing strategies, employing mostly word-of-mouth and referrals to increase product visibility.
At this time, the startup should have an in-depth understanding of the market, and a good grasp of its product’s target users. Most startups, in this stage, break-even and starts generating revenue.
“In the growth phase, the startup is most focused on increasing the number (quantity) of users. This is because, at this point, the quantity drives revenue.” – Tweet this
So, the strategy aims at keeping existing users and giving incentives to new users to have them try your product while expanding from the initial launch region to break newer markets.
The startup lifecycle, like some other development curves or lifecycles, comes to a stationary phase. At this stage, there are younger startups with newer technologies disrupting the market.
So, as the name suggests, this stage is the phase you resolve on the next step for your startup. Every founder and co-founder would get to this point and would have to make either of three decisions.
- Come up with newer marketing strategies to stay relevant in the market.
- Develop new products to create a business system around the initial product.
- Device a big exit strategy and re-enters the curve with a new startup idea.
Whatever your resolutions, there are outcomes to be expected.
A lot of statistics in recent times show that about 90% of startups always go down, and only about 2% of startups ever attract investments.
Inevitably, most of the startups in the failed 90% get there because they neglect important stages of their lifecycle or avoid pertinent questions in the process, sabotaging their growth.
A good understanding of the startup lifecycle is really important to navigate the waves of startup creation safely.
Are you a founder or entrepreneur? Feel free to share what you think about this article in the comment section.
Until next time, keep winning!