The 4 Stages of Founding A Startup

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More people than ever are going into business for themselves. If you’re considering founding a startup, look to these first four components, or “Marmer Stages”, of the startup lifecycle for guidance.

1. Discovery

This stage is about building a strong foundation from which your startup can build up. Since 25 percent of startups fail in their first year, 36 percent in their second and 44 percent in their third (accoutring to, this step is extremely important. Within the first five to seven months, you’ll want to solicit the advice of your mentors and evaluate your business’s potential with them and anyone else who will grant you an opinion.  Good questions to ask at this stage are: are we solving a problem? Will people be interested? The discovery stage also includes establishing your founding team and determining how to garner investments.

2. Validation

Once you have established that strong foundation, the next step is seeing if your great business plan can be validated by outside sources. Three to five months after your discovery period, see what kind of money or attention your business or product can acquire to make sure the public is interested in your product or service. Industries with startups still operating after four years include finance, insurance and real estate (58 percent), education and health (56 percent) and services (55 percent). During the validation stage, you should also look towards expanding your workforce beyond your founding members, and obtain seed funding.

Once you’ve got your first paying customers, you’ll also want to implement metrics and analytics to understand the buying patterns of your consumers.

3. Efficiency

You’ve founded your startup! The best way to grow and simplify now is to make your business process efficient. See what refinements you may be able to make to your business plan. With the implementation of your analytics and metrics, is there a way to improve the process of acquiring your customers? Analytics should also be able to assist you and your team with finding a repeatable sales process, and help your business reach viral growth.

4. Scale

This seven to nine month period is all about driving growth. Look towards continuing and growing your customer acquisition plan and building up the back-end of your business to keep up with the increasing scale of business. This is also the time period in your business where you will want to hire the first executives and establish different departments. If your business has reached the appropriate scale, start approaching large investors in a round of venture funding.

Information sourced from this ‘A Primer on Startups’ infographic.


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