There are millions of ideas in today’s world, and only a few of them will be realized. Creating a startup is complicated, difficult, and risky and also the Startup Development.
Often young entrepreneurs think that starting a startup is half the battle, but that’s not true. Ahead of them awaits, in addition to difficulties, logical stages of development.
Idea and prototype
The first stage of project development is at the level of an idea or hypothesis. It may be based only on a hunch and your intuition.
There are two directly opposite views: some are convinced, most often young entrepreneurs, that a well-developed idea is a key to success. Others believe that quality implementation should be the main priority. This is more true for experienced investors.
Rejections from investors and their opinion that your idea has no prospects – not the truth in last resort. Often the reason for rejection is age and lack of experience, and all the benefits will go to serial entrepreneurs or professional managers. No one is immune to misunderstanding and failure. The question is different: do you believe strongly enough in the potential of your idea?
According to studies, 90% of projects drop out at this stage, and funding more often comes from 3F or FFF (Friends, families, fools) rather than investors or “angels”.
At this stage, your project is getting more specific: you create a business plan, form a team, and have a prototype of the product. This moment can be considered the birth of the company.
There are several options for further developments for you and your project: either you get into an incubator or gas pedal and continue developing the company under the wing of more experienced managers without compensation, or you attract a mentor in the person of a more experienced entrepreneur who will mentor you and help you grow.
This route allows you to get to niche or professional events, meet other entrepreneurs, and network without too many obstacles.
Of course, you can decide for yourself and refuse this kind of help, use what you have at hand and not look for another. This is up to you.
At this stage, it is most often difficult to determine the prospects of the project, but there is still a chance to raise money for the development of the startup.
The seeding stage of startup development is one of the most difficult. It can last up to 1.5 years, which is a very long period for a young project.
During this time there may be a “restart” – a drastic change in the startup’s development direction and business model to keep the project viable. You will probably have to face this even more than once. During this period you test the strength of the business model and your team, so have patience and popcorn.
Death Valley is the stage of uncertainty, after which more than 50% of startups do not survive. What are the reasons? There are several.
Often startup founders don’t dive deep enough into working specifically on shaping their project and product development strategy. Instead, their attention is focused either on finding investors or on trying to finance themselves.
- Inability to delegate responsibilities
A successful startup = a cohesive team. It is not uncommon for the author of an idea to be greedy for responsibility or power, which makes him/her unable to distribute responsibilities among team members evenly.
When you have time to exhale and relax as you think, you should on the contrary focus all your attention on promoting and improving the product and work on expanding the team. So while you can not fill your head with the first cashout, it is still far away.
It’s time to look for investors again, at the Launch stage this should not be a problem. There is also a probability that you will not have to look for them at all but only choose from those who came to you.
The Scale stage is the time when you need to strengthen your team with promising specialists, to focus on the company, corporate culture, Paystub, financial statements, and budget distribution.
These are all details and bureaucracy that you will inevitably have to deal with, but I will never tire of repeating that people are your main resource worth reinvesting in. No one will want to use a product that is sold by people who are not as interested in it as you are. The person working for you spends most of his life, it should be treated with respect and appreciated.
Maturity stage and change from “startup” status to “full-fledged company” status. At this stage, you are finally out of the zone of turbulence and constant uncertainty.
You can let go of the reins a bit and begin to form a long-term development strategy for the years ahead: increase the scale of the company, expand the product line, improve quality, think about opening new branches in your country or abroad.
A Few Advice
Don’t jump ahead of the bandwagon
No one promised that the path will be easy, so excessive hurry, rash decisions can lead to disaster. Of course, you may turn out to be lucky and there will be no losses.
But answer the question: are you ready to surrender to change the fate of your project and your fate as well? I do not think so. So weigh your every move and decision.
Do not rush to find investment
At the self-sustainability stage of your startup, think twice about whether it is worth raising or agreeing to outside investment. To do this, conduct a thorough analysis of the potential of the project, and maybe the question of outside investment or selling a share of the company will disappear by itself.
Hire people who are stronger than you
As the company grows in size, there will be a need for top managers to whom you can fully entrust the management of certain parameters of work. Don’t be afraid of people who are stronger than you in the skills that will make the company grow.
The development of a startup is always uncertain, risks, hypothesis testing, and change. But there will come a stage of stability that requires a long-term strategy.
It’s often difficult for young entrepreneurs to look ahead 5 or 10 years into the future, but it’s a necessary skill to learn and to think through the steps and options for the years ahead.