You’re chatting with another entrepreneur about your businesses. Your buddy goes, “But enough about me, what stage is your startup in?” You think to yourself, Well, wait, what is my startup stage? What are the stages of a startup?
This article will break down the 6 stages of a startup and prepare you for answering that question.
Stage 1: Ideation
This is where you come up with your startup or product idea. What problem in which industry have you identified and what is your solution? Research, yes, dreaded research, occurs in this stage as well. Is your million-dollar idea truly worth that much or is it only a good idea on the surface? Market research is crucial for determining that. You can send out surveys to your target customer and read available complaints that are related to what you’re trying to solve. Determine your product’s product-market fit as well. Your goal is to discover if your idea, your solution, is a solution your target demographic wants. If your target demographic doesn’t want your product, you don’t have a solution.
Stage 2: Commitment
This is the startup stage where you truly commit to your product. You’ve invested your time into researching if your idea is viable and the data you collected is looking positive. At this point, you need to start developing your MVP: Minimum Viable Product. This may include creating a team, a business model canvas, and even generating user anticipation with a waitlist.
Stage 3: Traction
This is when you launch your startup! Congratulations, you’ve gone from the Idea stage to the MVP stage and officially launched your product. You’ve reached the halfway mark of the stages of a startup. This is the moment you put your research to the test. Is your startup viable? Do you have a product that your target audience wants? You’re gaining interest, growing your customer base, and continuing to push your marketing efforts.
Stage 4: Validation
In this stage, you’re taking in feedback from your customers and planning out your next steps. Do your customers love your product as it is? Are they starting to look for/suggest additions? It might be time to plan out new features you want to begin to add. Or is your product missing its mark and your customers aren’t satisfied? You may learn the importance of adaptation and being able to pivot based on feedback from your audience. Maddie Wang learned how to pivot her product, Sesame, during this stage as well.
Stage 5: Scaling
At this stage, you’re beginning to scale your startup. You’re handling a growing number of customers, increasing your product’s features, or increasing the number of products you sell. It’s crucial to designate company infrastructure, optimize marketing strategies, and hire enough talented people to fulfill necessary roles.
Stage 6: Establishment
You’ve outgrown the term startup and are now an established business. You’re seeing substantial growth, which is different from traction and pulling in significant revenue. It’s time to hire even more employees and expand your reach. You’re continuing to build on the foundation you’ve set in all the stages of a startup before this one. It might also be time to consider your next steps: expansion or exit?