Our foundational structure of startup assessment is the startup lifecycle. Understanding where a startup is in their lifecycle allows us to assess their progress. The startup lifecycle is made of 6 stages of development, where each stage is made up of levels of substages. This creates a directed tree structure and allows for more granular assessment by being able to pinpoint the main drivers of progress at each stage.
Our first four top-level stages are based loosely on Steve Blank’s 4 Steps to the Epiphany, but one key difference is that our lifecycle is product centric rather than company centric.
The 6 Stages
Purpose: Startups are focused on validating whether they are solving a meaningful problem and whether anybody would hypothetically be interested in their solution.
Events: Founding team is formed, many customer interviews are conducted, value proposition is found, minimally viable products are created, team joins an accelerator or incubator, Friends and Family financing round, first mentors & advisors come on board.
Time: 5-7 months (average for all types)
Purpose: Startups are looking to get early validation that people are interested in their product through the exchange of money or attention.
Events: refinement of core features, initial user growth, metrics and analytics implementation, seed funding, first key hires, pivots (if necessary), first paying customers, product market fit.
Time: 3-5 months (average for all types)
Purpose: Startups refine their business model and improve the efficiency of their customer acquisition process. Startups should be able to efficiently acquire customers in order to avoid scaling with a leaky bucket.
Events: value proposition refined, user experienced overhauled, conversion funnel optimized, viral growth achieved, repeatable sales process and/or scalable customer acquisition channels found.
Time: 5-6 months (average for all types)
Purpose: Startups step on the gas pedal and try to drive growth very aggressively.
Events: Large A Round, massive customer acquisition, back-end scalability improvements, first executive hires, process implementation, establishment of departments.
Time: 7-9 months (average for all types)
5) Sustain (not assessed in this report)
6) Conservation (not assessed in this report)
What happens at each stage can vary strongly based on the type of startup.