Starting the journey of building a startup is like setting sail in unknown waters -especially for those doing it for the first time-, where each stage from the initial concept to the strategic exit requires a blend of creativity, strategic planning, and resilience. This guide offers a beacon of light for entrepreneurs, mapping out the critical milestones of startup development—from the initial spark of an idea and the nurturing phase of research and planning to the unveiling of a minimum viable product and the robust growth stages, leading up to a stable, dominant position in the market or a grand exit through acquisition or public offering.
Here, we unfold the intricate narrative of startup evolution, highlighting the crucial decisions -in all aspects, marketing, business, funding- that shape the destiny of emerging ventures. From finding the initial capital to kickstart the journey, to mastering the dynamics of expansion in a competitive environment, this document gets into the core of surviving and thriving in the startup landscape.
Each chapter is a homage to the creativity and resilience of founders, providing key insights into navigating funding challenges, employing effective growth marketing strategies, and steering clear of pitfalls that can derail promising startups.
‘Nough said, let’s dig in.
20 years growing startups: Our top insights
Working for years with entrepreneurs and intrapreneurs these are the top 5 conclusions we ended up with:
Success hinges on a founder’s ability to master both the technical and the commercial spheres. An outstanding product is essential, yet its existence becomes inconsequential if it remains unknown to potential users or buyers.
The first growth hackers of the company should be its founders. They must pioneer their growth strategies, acquiring the skills necessary to evaluate and direct the efforts of others effectively. Dependence on external parties without the capability to assess their performance is a strategic misstep.
Entrepreneurship thrives on incremental, small daily decisions that demand a deliberate approach to decision-making. Founders must accept this reflective journey in close collaboration with their partners.
The delegation of critical functions, such as app development, website creation, or marketing strategy formulation, to third parties does not absolve founders of their responsibility. Active participation and commitment are non-negotiable for guiding external contributors toward the vision of the company.
Maintaining a lean and agile operation is paramount. Founders should focus on building a culture of adaptability, where rapid iteration based on feedback is the norm. This approach not only conserves resources but also positions the startup to pivot swiftly in response to market demands or obstacles, ensuring resilience and a competitive edge.
The art of securing funding lies in impeccable timing and discernment. Soliciting investments prematurely or from misaligned sources can derail a venture before it gains momentum. Founders must tread carefully, balancing the amount of capital sought with strategic timing and compatibility of investor objectives. It’s essential to recognize that the aspirations of investors may diverge from those of the founders, necessitating a judicious selection of partners who share a common vision for the company’s future.
The startup’s life cycle
In this chapter, we will navigate through the fundamental stages that define the trajectory of a startup, from the early stages of ideation and research to the pivotal moments of product launch, growth, and eventual exit.
These are the most typical Stages in the life cycle of a startup:
Idea/Concept Stage:
This initial phase is about brainstorming and developing a viable business idea. Entrepreneurs identify a market need or problem and conceive a product or service to address it.
Research and planning Stage:
Once an idea is formulated, the next step involves conducting thorough market research to validate the need for the product or service, understand the competition, and identify the target audience. This stage helps in refining the idea and developing a business plan. With the research in hand, planning involves developing a detailed business plan that outlines the vision, mission, value proposition, business model, market strategy, and financial projections. This document is crucial for guiding the startup’s direction and securing funding. If you need help structuring it quickly, an AI business plan generator can be a useful starting point.
Prototype/MVP Development (aka prelaunch Stage):
The focus here is on creating a prototype or a Minimum Viable Product (MVP) that can be introduced to a select group of users for feedback. This allows the startup to test its assumptions and iterate on its product or service before a full-scale launch.
Launch Stage:
After refining the product or service based on feedback, the startup officially launches to the public. This stage involves executing marketing strategies to attract customers and generate sales. Choosing the right location for your HQ is also important. Thus, identifying the best cities to start a business will help in terms of talent, resources, and market accessibility.
Growth Stage:
With a product in the market, the startup works on scaling its business. This can involve expanding the product line, entering new markets, increasing the customer base, and scaling up operations. The focus is on growing revenue and becoming profitable.
Scale-up Stage:
At this point, the startup has established itself in the market and looks to expand further. This could involve diversifying the product offerings, acquiring other businesses, applying for a startup loan, or expanding internationally.
Maturity Stage:
The startup is now a stable business with a significant market share. Growth may slow down, but the focus shifts to maintaining market position, optimizing operations, and maximizing profits.
Exit Stage:
The final stage involves the founders exiting the company, usually through selling the business, merging with another company, or going public through an IPO (Initial Public Offering). This is often seen as a success milestone, providing significant returns to the founders and investors.
Financing your dream
Financing your startup can take various forms, from seeking support from family to securing loans or investing incrementally. Here are some common options for funding your venture.
The typical way (funding rounds)
The types of funding rounds include bootstrapping, friends & family, pre-seed funding, seed funding, series A funding, series B funding, series C funding and above, mezzanine financing, private equity, debt financing, and IPO, acquisition, merger.
Bootstrapping, Friends & Family:
Entrepreneurs may start with their savings or borrow from friends and family to get their ideas off the ground. This stage is also known among founders as the 3Fs round – Friends, Family, and Fools. This is where entrepreneurs hit up their inner circle, tapping into their bank accounts, sweet-talking pals into believing their wild ideas, and convincing their kin to chip in.
Business loans:
For startups, securing a business loan can be challenging due to their lack of operating history and credit. However, startups can obtain loans by presenting a strong business plan, demonstrating potential for growth, and providing collateral or personal guarantees.
If you operate in the US, you can start by checking if you are qualifying for SBA loans. Guaranteed by the U.S. Small Business Administration, they typically require less stringent collateral and credit requirements.
Another effective way to secure funding is by using startup business credit cards with no credit requirements, which can provide immediate access to capital without extensive financial history.
Pre-Seed Funding:
This early investment, often by wealthy individuals, is often used to cover initial market research and business plan development.
Seed Funding:
Once a prototype or MVP is developed, seed funding helps finance a limited production or service launch to further validate the business concept with actual customers.
Series A Funding:
After proving the business model during the launch stage, Series A funding helps startups scale by optimizing product offerings and market strategies.
Series B Funding:
Targeted towards startups that are ready for further growth, Series B helps finance expansion, such as entering new markets or increasing marketing efforts.
Series C Funding and above:
Aimed at scaling the business significantly, funding at this stage and later stages (Series D, E, etc.) often involves larger sums of money and may include more strategic investors.
Mezzanine Financing, Private Equity, Debt Financing:
These types of financing are more common in the maturity stage, where the company is stable and profitable but seeks funds for expansion or restructuring. To help protect against common debt-related risks in these situations, forming an LLC is important, as it shields the owner’s personal assets from business liabilities.
IPO, Acquisition, Merger:
In the exit stage, the startup seeks to provide returns to its founders and investors, often through going public, being acquired by another company, or merging with another entity.
The alternative way (the brave one)
Going to the moon (metaphoricaly speaking), can be quite challenging, but not entirely impossible. It depends on the nature of your startup, the industry, the market, and the resources you already possess. Here’s a strategic breakdown:
Bootstrapping:
If you decide to self-fund (bootstrap) your startup, you retain full control, but this approach requires you to be highly resourceful, with a keen ability to operate within means, manage cash flows meticulously, and possibly grow at a slower pace.
Reinvesting Profits:
You could fund your venture by reinvesting early profits back into the company. This method demands that your business model generates cash quickly and sustainably enough to support growth.
Pre-sales or Crowdfunding:
Another option is to generate funds through pre-sales or launching a crowdfunding campaign. This can work well if your product has a compelling value proposition and you can communicate that effectively to potential customers or backers.
Strategic Partnerships:
Forming strategic partnerships with other businesses can also provide resources or capital in exchange for shared profits, joint venture agreements, or bartering for services.
Grants and Competitions:
Applying for grants, entering startup competitions, or other non-dilutive funding sources can also raise capital without giving up equity. However, these sources are highly competitive and may not be available for all types of businesses. Also, the issue here is that many times, participating in competitions is very much defocusing from the day-to-day running of the business. Competitions may be very districting for the founders and they require significant time to prepare and also some travels.
Lean Startup Approach:
Adopting a lean startup methodology can minimize your need for substantial funding. By focusing on building a minimum viable product and using customer feedback to iterate, you can reduce the upfront investment required.
Remember, each of these paths has its challenges. Without external funding, growth might be slower, and there may be limits to how quickly you can scale. You’ll need to be adaptable, frugal, and strategic in how you allocate your limited resources. If your ‘moon’ is a highly capital-intensive destination, the journey might be longer and more complex. But with determination, a solid business plan, and a marketable product or service, it is possible to reach great heights on your own terms.
Deciding about funding.
As the image illustrates the multi-stage process of a space vehicle’s launch, with each stage having a specific function that propels the vehicle closer to orbit. Drawing a parallel between this process and the funding needs of a startup can be insightful:
- Initial Ignition (1st stage motor ignited): Like the initial thrust needed to launch a rocket, a startup requires initial funding to kickstart its journey. This initial capital is akin to a rocket’s first-stage engine—it’s what turns an idea into a tangible business, allowing for the creation of a product prototype or market research. This stage might be fueled by personal savings, friends, and family, or angel investors.
- Stage Separations and Ignition of Subsequent Motors (1st and 2nd stage): As the rocket ascends, it sheds stages to remove weight and ignite new engines to push further into space. Similarly, as a startup grows and progresses through development phases, it requires additional funding rounds to scale operations, expand the team, and increase market reach. Each funding round (Seed, Series A, B, C, etc.) provides the necessary capital and resources to reach the next level, just as each stage of the rocket provides the thrust to get to the next phase of the journey.
- Fairing Separation: The fairing protects the payload during the initial part of the launch; once it’s no longer needed, it’s discarded to save weight. Startups also shed what’s no longer needed as they grow, which could be initial product iterations, pivoting away from strategies that don’t work, or even letting go of initial team members who may not fit the company’s growth stage. Funding helps the startup to manage these transitions smoothly. Leaving “baggage” behind may also mean performing something which is called “management change”. Let’s analyze that a bit: In the world of startups, there’s a saying that floats around like a paper airplane: “What got you up and running won’t always take you global.” Picture this: the original dream team sparks a brilliant idea, like a match that lights a bonfire. But when it’s time to spread that fire across the globe, sometimes you need a different kind of spark—someone who knows how to fan the flames far and wide. It’s like realizing that the one who planted the garden with care might hand over the watering can to someone else when it’s time to grow a forest. Changing leaders doesn’t mean the first ones lost their magic; it’s just that the next part of the story needs a different kind of magic.
- Reaching Orbit (Spacecraft separation): The ultimate goal of the launch sequence is to place the spacecraft in its intended orbit. For startups, the ‘orbit’ is a sustainable, profitable business model. Funding at later stages, like late-stage VC funding or an IPO, supports the startup’s final push toward becoming an established player in the market.
The entire launch process requires precise timing, expert knowledge, and the right conditions to succeed—much like funding a startup at the right time, with the right investors, and under the right market conditions. Without the necessary capital at each stage, just as without the necessary thrust and separation events, the startup, much like the rocket, may fail to reach its intended destination.
Funding rounds & startup stages
Although we have created a table that aligns these stages with the common types of funding rounds. It’s important to note that not all startups will go through every stage or funding round exactly as outlined, as the journey can vary greatly depending on the business model, industry, and other factors.
| Startup Stage | Funding rounds |
| Idea/Concept Stage | Bootstrapping, Friends & Family (the 3Fs) |
| Research and Planning Stage | Pre-Seed Funding, or angel investors |
| Prototype/MVP Development (aka Pre-launch phase) | Seed Funding |
| Launch Stage | Series A Funding |
| Growth Stage | Series B Funding |
| Scale-up Stage | Series C Funding and beyond |
| Maturity Stage | Mezzanine Financing, Private Equity, Debt Financing |
| Exit Stage | IPO, Acquisition, Merger |
Deliverables per stage
What should you have in hand in each stage?
| Startup Stage | Deliverables (assets, concepts, apps) |
| Idea/Concept Stage | A landing page describing your idea. Not a PPT. not a Business Plan. A landing page |
| Research and Planning Stage | A website with a proper content strategy |
| Prototype/MVP Development (aka Pre-launch phase) | A prelaunch campaign and a prelaunch landing page and a set of landing pages to start experimenting with ads. Also you need to have a Social Media Strategy in place |
| Launch Stage | A full-blown website and a set of landing pages to start experimenting with ads. Also social media with value and if possible viral content |
| Growth Stage (Scale-up’s) | A full-blown product and a full-blown website. You need to run a reposition and value proposition exercise to make sure that you have the theory to support your next funding rounds and growth |
| Scale-up Stage | SEO optimization at all levels and if possible is now time to create your micro-monopoly. |
| Maturity Stage | You need to keep running keyword research and competitive analysis every 6 months to play defense and make sure that new competitors are not entering your field |
| Exit Stage | Everything is in place. Awareness campaigns should be executed to support the maximum return during the exit attracting the best possible buyer or micro-investors (in case of IPO) |
What to do in each stage (Marketing wise)
Based on our illustration below, you can visually see the progression and the tasks you have to do for your startup from the initial idea phase to earning its first revenue.
In particular
- Idea/Concept Stage: This is the conceptualization stage where you conduct keyword research, define your customer personas, generate content, and write website copy. If you were believing, that this stage is about making a ppt, that’s a thing of the past. Materializing your idea needs some initial data and Validating your idea needs more data. And data as well as credible feedback comes with you having a web property out there.
- Website: You move on to establishing a digital presence with a website, which on-site SEO (that’s mainly about having a content strategy plan), pre-launch concept planning, and content development to kick off your pre-launch campaign.
- MVP (Version 0.1): The development of a Minimum Viable Product (MVP) begins. Here, technical specifications are determined, the technology and marketing stacks are chosen, a marketing plan is crafted, and a working demo is created. It’s now time for on-page, technical SEO, making sure that each page you will create has all the SEO characteristics that will help you to Rank. Customer Data Platform (CDP) is enabled, and preliminary market fit (PMFit) experimentation takes place.
- Product V1.0: This stage is about achieving a full-fledged product that’s market-ready. You’ve worked on the app (web or mobile), enabled feedback loops, and conducted data visualization to see user’s journey and the flow of data from different channels. This leads to a solidified Product-Market Fit, where the product has been refined and is ready for a broader launch.
- Product V1.1: Post-launch, the product undergoes further refinement based on user feedback. This involves nurturing users, analyzing data, building viral loops, adapting monetization strategies, developing a referral strategy, and managing customer churn.
- First Revenue: The stage where the startup begins to generate its first sales. Here, Sales Development Representatives (SDRs) are deployed to accelerate growth and revenue.
- Growth Stage: Certainly after the Product-Market-Fit and after getting users that are paying for your stage it’s now now to deal with some issues of importance.
Mistakes to avoid
The road to startup success is often unpaved and can lead to the dreaded “valley of death” where insufficient traction or funds can end the journey. Each of points below emphasizes what not to do if you aim to build a sustainable business that not only survives but thrives.
- Idea/Concept Stage: Don’t rush past the idea stage without sufficient validation. Take the time to research and validate your idea before moving on.
- Pre-Product Stage (MVP): Avoid jumping straight into building a website without having clear specifications, a content strategy, a chosen technology stack, a marketing/technology (aka martech) stack, and a detailed marketing plan. Don’t develop your website without ensuring that you will march the demand (meaning you will write content for keywords, people are searching)
- Regarding the product, even in its MVP stage, a common pitfall here is not having a working app with an enabled Customer Data Platform (CDP), not setting up feedback loops, and not visualizing data. Don’t skip these, as they are crucial for learning from early users.
- Product V1.0: Don’t launch without adequate preparation. Neglecting to allocate time for a pre-launch, not analyzing data, and launching too early without testing and feedback are mistakes that could lead you into the “valley of death” where many startups fail due to lack of traction and funds.
- Post-Launch: After the initial launch, it’s a mistake to not focus on user nurturing, not analyzing data, failing to adapt based on feedback, not building a referral strategy, and not having a plan for dealing with customer churn.
- Product Market Fit: Don’t think the job is done once you’ve launched. Continuously work on content, iterate based on feedback, and fine-tune your SEO to ensure you find the right fit in the market. Also, here, make sure that you get the correct signals from the market regarding PMFit
- First Revenue: Don’t expect the first revenue to come without effort. You need to have a full launch plan, a monetization strategy, and continue experimentation to reach a profitable stage.
Prioritise (your marketing activities) or die
Navigating through the different stages of a startup’s growth requires a strategic approach to marketing, one that aligns with the evolving needs and objectives of the business. Acknowledging the necessity of a proactive, front-loaded strategy is part of the entrepreneurial journey. The emphasis here is on mindful investment in growth marketing services that resonate with the specific phase your startup is currently in.
Below, we have categorized digital marketing services according to each phase of a startup’s development as previously described, ensuring a bespoke marketing strategy that complements your startup’s lifecycle.
Idea/Concept Stage:
- Defining Your Niche Online. You need to create the marketing personas of the decision-makers and locate the online channels where they exist.
Research and Planning Stage:
- On-site SEO Strategy: Start with keyword research and market analysis for future content. You need to understand at that early stage if you have the chance for organic growth
- Analytics & Actionable Reporting: Set up tools to monitor market and audience behavior.
Prototype/MVP Development (Pre-launch Stage):
- Positioning Strategy. A tapestry of knowledge that is essential for the precise positioning of a product. Each insight helps in tailoring your product’s messaging and development to meet the market where it is and to guide it toward where you envision it should go. This service includes all the below services.
- Referral & Viral Marketing: Encourage current users to refer others and design viral loops.
- Branding. Develop a professional brand identity including a logo, business card, and presentation template. Your brand should reflect your expertise and the unique value you offer.
- UX for Growth: Ensure the MVP provides an optimal user experience.
- SEO Copywriting: Develop content for your website that resonates with your target audience and adheres to SEO best practices.
- Social Media Strategy: Begin building an audience and engaging potential customers.
- GDPR Compliance: Ensure all marketing practices comply with data protection regulations, which is critical as the company grows.
Launch Stage
- Inbound Marketing: Create valuable content to attract and engage a target audience.
- Growth Hacking: Implement rapid experimentation across marketing channels and product development.
- Performance Marketing (PPC): Drive immediate traffic to the new product launch through paid ads.
- Social Selling: Leverage social networks to directly promote the product to potential customers.
- Engineering as Marketing: Use product features as a marketing tool to drive user interest. From a questionnaire to a sophisticated wizard, all those are part of the same service
- Product-led Growth (PLG): Use the product itself as the primary driver of user acquisition, conversion, and expansion. Add the basics such as feedback collection and product analytics
Growth Stage
- No-code marketing to build you micro-monopoly, which is a set of web properties around your niche.
- Enhancing Social Selling: Leverage social networks to directly promote the product to potential customers. It will be used for prospecting so that your SDRs to focus on closing rather than opening.
- Growth Hacking: Implement rapid experimentation across marketing channels and product development.
- Product-led Growth (PLG): Use the product itself as the primary driver of user acquisition, conversion, and expansion.
- Link Building: Strengthen SEO efforts by acquiring high-quality backlinks to improve search engine rankings.
Scale-up Stage
- Analytics & Actionable Reporting: Use data-driven insights to optimize marketing efforts and scale efficiently.
- Performance Marketing (PPC): Scale up paid campaigns focusing on profitable channels.
- Outreaching Strategy: Leverage industry relationships and PR for brand visibility in preparation for exit opportunities.
Maturity Stage
- Brand Strength Analysis: Establish the foundational elements of the brand identity.
- SEO and Competitive Landscape: Make sure you don’t have a new player in the market (younger and faster) coming and it’s not on your radar sooner than later.
- Content Marketing and Strategy: Focus on establishing thought leadership and maintaining organic reach.
Exit Stage
No specific services for you guys. Just do all of the above better ;-). Also, focus on some awareness campaigns and community management to maintain your good reputation and play defense for those who will try to defame you at that very important stage of your lifecycle
Conclusion
In navigating the complicated journey of a startup, from its inception through to its zenith and potential exit, the strategic deployment of growth marketing stands as a pivotal underpinning for success. As we’ve explored the myriad stages of a startup’s lifecycle—each marked by its distinct challenges and opportunities—it becomes evident that a one-size-fits-all approach to marketing simply does not suffice.
Tailoring your marketing strategies to align with each phase not only amplifies your venture’s growth potential but also ensures a robust foundation for scaling, pivoting, and thriving in an ever-evolving market landscape.
Dear founders, these are the two (2) key takeways of this article:
- Become the first growth hacker of your startup by acquiring your missing skills and
- Avoid the “valley of death” by proper prioritization of your resources (financial and human)
Last but not least, don’t shy away from reaching out to a startup marketing agency and see how they can help you.
Get the full ppt for free
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NEXT LEVEL.
Theodore has 20 years of experience running successful and profitable software products. In his free time, he coaches and consults startups. His career includes managerial posts for companies in the UK and abroad, and he has significant skills in intrapreneurship and entrepreneurship.
