Waqas Ahmed Ansari
March 20, 2017
Musstanser Tinauli
March 24, 2017

The Stages of a Startup

plan9Giving birth to a new life is never easy. Be it a human or your business.

As the founder and CEO of your business, it’s very important to know the stages that your startup goes through so that you know how to manage things in a way that not just allow your startup to breathe but take the corporate world by storm.

The stages of a startup

Stage 1. The Idea Stage

You’ve an awesome idea? Great! But that’s not enough. Before you step into the ring, the first thing you must do is to reflect on yourself.

A. Self-Awareness

Ask yourself these questions:

i. Am I passionate about the idea?

The success of your startup is a direct reflection of your love for your work. No matter how great your idea sounds to you, but if the foundation of your startup is not your passion, your startup will only go up to a certain level and might even die before time.

Do what makes you happy. No matter how crazy it sounds to the world. Have undeniable faith in yourself and go for it.

In the words of iconic Steve Jobs,

“You have to have a lot of passion for what you’re doing because it gets so hard that if you don’t, any rational person would give up. It gets really hard and you have to do it over a sustained period of time. So if you don’t love it, if you’re not having fun doing it, you’re going to give up. The only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle.”

ii. Am I betting on my strengths?

Before you even think of going out there, you need to know who you are.

What’s your hard core strength?

What is that one thing that puts you in a position to succeed?

Identify your strengths. Your talents.

“You can never run away from who you are. Forget about all those ninety nine percent of the things that you suck at. Focus on that one thing that you’re good at!” – Gary Vaynerchuk CEO Vaynermedia

iii. Where do I stand right now?

Our brains are wired to come up with excuses and blame others for not having what we want to have. So before you jump into the business world, you must know where you currently stand.

What are the areas where you’re falling behind?

What are your weaknesses?

Don’t try to be a do-it-all person. Get someone on board to do the things that you’re not good at.

B. Stepping out of Utopia – The Lean Canvas Exercise

The thought of having your own startup sounds super exciting to any one! We know. But unfortunately, we don’t live in a fantasy land. We have to go through reality checks.

Before you start building your product, you must answer the following questions:

i. What is that one problem that you’re trying to solve?
ii. How will you solve it?
iii. Who is your competition?
iv. Who is your target audience?
v. How big is your market?
vi. What is your Unique Selling Point? What makes you different from the rest?
vii. What is your budget?
viii. How will you market your product?

Stage 2.  Building-The-Prototype Stage

Time to turn your idea into reality.

A. Team Building

After your hard work if there’s anything that can make or break your startup, it’s your team. Yes, it’s that critical! Giving a physical shape to your idea requires having a strong, dedicated team.

Having the right people on board is the thing that will get your business going on in the darkest of times even when everything seems to be against you.

B. Building a Minimum Viable Product

Now that you’re done with ideation, it’s time to execute on those ideas and build a prototype. As the CEO of your company you have to make sure that your goals for your startup are perfectly aligned with your team’s goals. You have to make sure that your team is actually executing on those ideas.

During this phase, focus your energies on polishing your product instead of creating a perfect one because it will never be perfect unless you know what’s perfect for your potential customer. And you can only know that once they use your product.

The best way is to build a Minimum Viable Product (MVP), an inexpensive version of your product, to enable market testing and getting the sense of product acceptance.

Once you’re done with that, your startup enters into the third phase of its life cycle.

Stage 3. Taking your craziest idea from an MVP to live product – The Beta Stage

This is the stage where your ‘maybe’ gets clarity driven by a close feedback loop between the customers and the product team. According to Buffer,

“The beta stage makes it easy for you to take your risky product hypothesis from an MVP to launch, fueled by the feedback and evangelism of a passionate tester community.”

A perfect example of this would be DropBox. The company published this video to explain its service to its potential customers using an MVP. This video alone got the company 75,000 customers while they were still in their beta stage.

In this phase you get to know the real value of your product via hands-on feedback from the market. It’s the best source to identify flaws in your product that’ll in turn enable you to make revisions to your prototype and come up with an improved version of your product before the launch.

Demonstrating Efficacy – Market Studies

To overcome the shortcomings identified in the third phase, market study is your best ally.

At this point you have to keep track of your Key performance Indicators (KPI’s) and every possible variable that surrounds the startup in order to come up with a product that fits best into the ecosystem. This is the phase where your efficiency comes into play.

Be very proactive in collecting data during customer trial phase as it is this database that will be the foundation in refining your product. The basic agenda here is to increase the customer base in the most effective possible way.

Stage 4- Getting a paying customer -The Launching Stage

Now comes the big question. Will people pay you for the product?

Cash is oxygen for any business on the face of this Earth. If you can’t sell, your business is out of business. If you want people to spend their money on your product it has to offer them massive transformational value.

But how do you do that?

Keep repeating the third cycle until your prototype improves to a level where you get your first paying customer. Having people to buy from you is the first check mark for your startup.

Stage 5. Market Expansion – The scaling stage

It’s time to step on the gas and push the growth aggressively. It’s time to scale your business internationally.

Scalabilty, in simple words, is the capacity of your startup to grow yet keeping the costs as low as possible. This is what we call a ‘sustainable business’. Now that you have developed a recurring business model and have a significant number of customers, your next step is to expand your market reach.

At this stage of life, your startup must develop the strength to compete with global players. Target the markets where the cost of customer acquisition is less than the life time value of the customer.

This is primarily the customer base stage. Once you successfully scoop in your first customer, your next challenge is to increase that number. It won’t happen exponentially overnight. Let’s be realistic. It will take a little while before the market accepts your product.

If you’re successful at tapping into your prospects’ psychology and convince them that your product is ‘The Solution’ to their problem they’ll roll in to buy from you.

Your goal at this stage should be to grow the company in revenue by targeting a larger market base. This is the right time to seek angel investment.

Build a compelling case around your business. Prove that your business is operating well and how investing into your startup will result in a sizeable Return On Investment for them.

Keep in mind, when you’re choosing an investor it’s not just the cash flow that you should worry about but it’s very important that the investor actually contributes to your company’s growth by sharing their expertise.

Now that you’ve raised the capital, it’s time to break through globally. Evaluate the feasibility of venturing into various countries based on their market sizes, your company’s capacity to tap into those markets’ demands and how long will it take you to break even in those markets.

When it comes to going global, you have two primary choices:

a. Hiring your own sales force to directly sell to people in those countries, or
b. Finding a distribution partner.

Hiring your own sales team has one major benefit. Dedication. Your sales team will solely be focused on selling your product but in the short run this will cost more until the team starts bringing sales revenue enough to at least cover up the costs of operations.

On the other hand, partnering up with distributors will cost you less initially but they won’t be dedicated for selling your products unless your product reaps them a good amount of profits. This in turn can potentially translate into lost sales.

Stage 6. Maturity and Possible Exit Strategy

Finally, it’s time to ask yourself the BIG question:

Are you ready to run a public company?

Nothing comes without a price. Getting public brings with it dealing with investors, shareholders and financial regulators.

But if it’s not enticing enough for you, you can always find a company that is willing to acquire you. If the acquiring company is big enough, acquisition offers you two main benefits. One, it will give you the cash flow that your company might not generate in its life time. Second, the acquiring company can take your startup to the next level.

The X- Factor


No matter how great your idea is, it will not work unless you work on it.

Over To You

Which phase is your startup going through? Let us know in the comments below. If this post was of any value to you, don’t forget to share it with your friends. Would mean a lot to us! 🙂

About The Author
Anam Tahir is the Marketing and Research Strategist at Plan9, Punjab Information Technology Board. Coaching is her hard core passion. Self-development and marketing interest her the most. You can catch her on Twitter and Facebook.


  1. Umair Asghar says:

    Ok. Good one.
    About Passion… too subjective. How can one measure or quantify it. Everyone has different amount / degree to be passionate.

    I think the most importa things are
    – knwing what you are doing
    – having knowledge and understanding of the industry and its norms.
    – Great, Dedicated team (as u said)… this is too vital for growth
    – and being steadfast. One should not stop towing the line that one has drawn, i.e. keeping up with your plan and not leave it, what so ever the difficulties come.

  2. Well, I liked the idea.

    I have really long term and multi-billion investment plan. I would like to know, how does Plan 9 start a negotiation with Startups?

    Looking forward to hearing back from Plan 9.


    Khubaib ur Rehman

    • Anam Tahir says:

      Thank you Khubaib 🙂 Well Plan9 incubates idea-stage startups. The process of it begins from our flagship event, The Launchpad. It is held semi annually. Each incubation cycle is of 6 months. For details, click the tab incubation under programs on the top menu bar.

      Hope that helps. If there’s anything else you want to know. Let me know.

  3. Zubair says:

    Excellent article.

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