Startup development phases
It is widely known that only 1 out of 10 startups is successful. However, this statistics is not the full scope. Broadly speaking every 1 out of 600 startups really achieves success. Let’s discuss why!
Startup development process
Obviously, any startup or business goes through several stages of development. These stages are the following:
No matter what niche a startup aims at, no matter where startups situated is, the scheme remains the same. Briefly about each stage and what startup is looking for at each stage:
- Stage 1 is about generating hypothesis, looking for co-founders, forming a team, participating at startup conferences, hackathons, pitching the idea, go to crowd looking for expertise, start customer interviews activity.
- Stage 2 is about testing the idea and the team. The question is: whether the formed team is capable of working together with the aim of creating a successful startup. Founders build a prototype or even MVP, test it, continue performing customer interview, look for mentorship, grants, early-stage acceleration.
- Stage 3 is dedicated to product and market validation. The team wants to know does the market really need the product they create. At this stage startup requires mentorship, angel or early-stage investments, acceleration.
- Stage 4 is about validating selected business model. Testing a business model is a topic for a dedicated series of articles actually but in general the question is: “Is selected target audience ready to pay for our product or service?”. Here startup looks for corporate acceleration, seed investments, mentorship.
- The last stage is about scalability. Local product or service tries to go global, to offer services worldwide, to enter new markets or to scale the existing product adding new features. At this stage startup, though it can already be named as business, looks for late stage investments.
Surely, transition to each stage means that every previous one is successful for the given startup.
Successful startups
Ok, so let’s add some numbers to mentioned stages:
These numbers show us that every stage eliminates a certain part of startups. What’s more, percentage of eliminated startups vary from stage to stage which means that stage difficulty varies.
So, we see that only 1 out of 600 startups might become a so called “unicorn startup”. Together with this, a lot of companies perform 4 steps only and stop, because successful completion of 4 stages already means that startup became a successful, stable business. And it is up to founders and shareholders to decide will the scale or not. Positive decision at this stage usually means that together with entering new markets the company goes to IPO.
We also see that 6 startups remain after 4 stages which means that just 1% of initiated projects are capable of transforming to stable working company.
And startups that have successfully completed all the mentioned steps could be found today in Fortune 500, Fortune 1000 and other similar listings.
If we talk about timeline of the process, so in general every stage takes 3-12 months, providing that the team works 24/7 on the given startup exclusively, and the whole process takes about 2-3 years.
By the way it is possible also to name stage 5 as Validation BY the scalability due to the fact that on stages 1-4 startups itself tests and validates something, and it is possible to say that on stage 5 the scalability tests the startup. However, most likely the team has enough experience to do it successfully to that moment already.
Summary
In case you are working on your project or startup, prepare to go through above mentioned stages. All in all there are 5 development stages, starting with idea generation and forming a team and ending with validation of scalability. All the steps are connected with overcoming difficulties and a certain part of startups disappears after this or that stage. In general only 1 startup out of 600 is capable of passing all the stages.
By the way, right software development strategy is an aspect that lets founders to focus on business goals which is a key to success. Address to Code Inspiration team to outsource your software development to a reliable partner.
Code Inspiration team wishes you to be successful in your projects!
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