Any company during its existence goes through particular stages of business development. Currently, one of the urgent opportunities for innovative development of the economy is the increased activity of startups, which are the areas of breakthrough technologies and free entrepreneurship. If earlier startups were mainly launched in the field of IT technologies, today they have become a universal organizational form of doing business in numerous areas.

Startups are newly created enterprises or projects at the stage of development that run their businesses either based on innovative ideas or recently emerging technologies. Any KPI startup has its specific features related to its approach to the business activity, product characteristics, and high risks in the market. This, in turn, determines the characteristics of the startup life cycle, which can vary from several weeks to several years.

Startups At an Early Stage 2

Stages of Startup Development

One of the key parameters of startups is their multi-stage development. Each stage is featured by its characteristics of the financial situation in the enterprise. At the same time, not every successful startup must go through all the stages. Sometimes, it happens that some stages can be skipped. The allocation of stages is based on the idea development, the readiness of the product or service, the startup scale, and the number of potential consumers.

Different approaches can be found regarding the stages of startup development, as well as several ways to divide the life cycle of a startup into stages. According to one of the classifications, the stages of startup development are associated with the life of a plant. In this way, the seed is planted and watered. Then, it grows into a stem with leaves and it develops. As a result, a flower appears. This flower is a symbol of the maturity of a plant, and in the field of entrepreneurship, maturity means that a startup has grown into a stable business. Accordingly, we can distinguish:

  • Seed stage;
  • Launch stage;
  • Scale or growth stage;
  • Maturity or expansion stage.

Early Startup Stage

It is conditionally possible to divide the early stage of startup development into three sub-points: early, middle, and late phases. The early phase lasts from the moment when the idea is born to organize a business. All startups start from generating a concept. At this stage, a team is selected and some market research should already be underway. A detailed business plan may not be developed yet. During this phase, the business model or the ways to promote the product can be changed.

In the middle phase, the general idea and goals of the startup are formed. Based on this, a business plan is drawn up. The startup team should conduct market research, as well as acquire the necessary patents and licenses to do business legally. The startup founders have to clearly understand the situation in the market and what customers want to buy. KPIs for startups can reflect the core ideas of the product and give realistic feedback about its value for customers.

At the final phase of the early stage, a basic version or a minimum viable product (MVP) is usually created. Using it, the startup team confirms the demand, that is, the availability of consumers willing to buy this product. The product prototype, tested on the first clients, generates customers’ feedback on its present or missing features, as well as gives an idea about the startup KPI. Although KPIs for startups can vary in different industries, revenue and the number of active buyers are the key metrics for startups.

Final Words

Startup development stages are considered only for successful companies, the number of which does not exceed 1% of the total number of business projects. To make a venture successful, its founders have to analyze the startup KPIs regularly. Based on the key metrics, startup owners can timely adjust their strategy and take the right decision.

Clara Mitchell

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