Startup is a term for a startup company that is looking for a temporary and business model, the initial goal of forming a startup as a “seed” for a new company that is expected to grow and become big in the next few years, if analogous to startup life also has a growth cycle that the same, starting from seeds, sprouting, growing and maturing.
To make a startup as a large company, of course, strategic steps are needed in passing it step by step. To determine what actions to take, we should understand and understand what the stages of a startup are to reach maturity.
In order to become a large company, here are the 5 stages that startups must pass
According to Morgan Brown, there are 5 stages that must be passed to get to the stage where a startup can be called a mature company. Morgan currently serves as a leader in a growth hacker team at Qualaroo, GrowthHackers.com, and a number of other high-growth startups in America, here are 5 startup stages:
- Problem/Solution Fit
- Minimum Viable Product (MVP)
- Product/Market Fit
- Scale
- Maturity
The first stage: Problem / Solution Fit
When you already have an idea of what product to make, either based on the personal problems you are facing right now, or you see the problems that exist in society or the environment, congratulations, this is a good start.
At this point, ask yourself two questions:
- Are you motivated to solve the problem?
- Is the solution that you are going to offer can solve the problem effectively?
If your answers to the first and second questions are “YES”, then you already have a problem / solution fit and hypothesis, and now it’s time to start testing your idea.
What you have to do at this stage:
- Study the Lean Startup framework and apply it to your discovery process.
- Conducting interviews to dig deeper about the problem / solution fit.
- Have a hypothesis about who might be the target users of your product.
- Find people who fit that profile and try talking to them.
- Ask some questions to understand how they see the problem and what they are doing to solve it.
- Find out more details about “Pain Points” around their problem.
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If possible, you can run a “Demand Test” such as creating a Fan Page on Facebook to test how much interest people have in your product.
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Use a landing page or even a crowdfunding campaign to test demand.
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If someone “bites”, now is the time for you to invest in making a product.
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Use the data from interviews and test requests to get started designing your MVP blueprint.
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Repeat several times the suggestions about problems and solutions as new information material.
Second stage: Creating an MVP
The purpose of this second step is to test your product hypothesis with a relatively small investment of money and time, even though the name is a minimum product, keep in mind that an MVP must meet the eligibility as a product. This way you can prove there is demand, learn about customer behavior and minimize risk.
What you have to do at this stage:
- Referring to a Lean Startup Framework is a best practice for building an MVP.
- You need to know, to make an MVP it can take only one day, but it may also take up to 6 months. There are various types of MVP and you must be smart to use the judgment to decide whether the MVP is enough to test your idea.
- Do a search of multiple distribution channels to get some early adopters for your product so you can measure retention.
- Do moderately, based on what you need to get early adopters.
- Prepare yourself to invest more when you want to move on to a larger scale.
Third stage: Product / Market Fit
If your MVP gains traction, you already have customers willing to pay, they buy again and continue to use your product regularly, and they even tell their friends about your product. This is a sign that what has been made so far meets the rule of product / market fit.
What you have to do at this stage:
- Test for product / market fit
- Use surveys to understand how they feel about your product
- Measure the Net Promoter Score (NPS) if the result is 9 or 10, then you are in good shape.
- Using the Sean Ellis Test for product / market fit – if the results are 40% or more of users saying they would be very disappointed if your product no longer exists, this is a good indicator of market / product fit.
The fourth stage: Scale
At the scale stage it is time for you to prepare your startup to grow bigger, at this stage you already have an idea of how many distribution channels are working effectively, you are confident about the conversion flow and the retention rate, so you should spend a lot of time doubling it.
What you have to do at this stage:
- Hire specialists for each channel, providing them with the necessary resource support to execute it. For example, such as providing a design or engineering or a sufficient budget for acquisitions.
- Use tools to scale and track the growth of your startup.
- Once you know what kind of way to pay off, the next step is to build a growth system for each channel. In this case, where you have to define and document which processes drive the growth of your company.
The fifth stage: Maturity
The sluggish rate of growth of your startup can influence the company’s process towards maturity, but at the world’s leading technology companies, that maturation process never stops. This process is shaped as a company’s culture and DNA.
The growth process is never finished. Take the example of LinkedIn which is almost 20 years old and they continue to drive growth trials. The same is true for Facebook. Facebook has more than a billion users and they buy various applications and conduct all kinds of experiments.
What you have to do at this stage:
- Looking for opportunities to expand overseas. Building local teams to adapt products based on experiences, intricacies and cultural nuances of each new area.
- Look for opportunities through the acquisition of other companies that match your product. Target acquisitions can sometimes give your startup access to new markets, but in terms of the very similar characteristics of existing users, and acquisitions also help you add value to what you offer your product to current users.
- Continue to invest in team growth and develop, experiment and search for new growth channels on an ongoing basis. Look for possible target users who haven’t used your product, try to find out why they haven’t found a way to access your product.
Do not let you do work in vain, work that you are not yet ready to do at a certain stage, for example at the MVP development stage you have rented an office, hired several employees, even though your startup should not need it and are not ready for it.
Of the 5 steps above, there is only an overview of how the startup process goes through step by step, starting from finding ideas, Problem / Solution, making a Minimum Viable Product (MVP), testing Product / Market Fit, doing Scaling, getting big until it reaches Maturity.