Five Stages of Startup: Level 2 -- Start

Risk, Creativity, Logistics, Planning, Execution
Go To Comments

The five stages of startup I'm discussing are not THE five stages of startup. They're just landmarks, broken down and generalized into something that we can all hopefully use as a guide, not gospel.

Last time, I defined and discussed the first level of what's basically a generalized startup timeline. Level 1: The Jump, covers the period of time before the thing is actually a thing -- when it's just a great idea that will become a great product that can be sold to a market by a company.

And, of course, the moment when the entrepreneur has decided that they're all in on starting that company.

Read Level 1: The Jump if you haven't.

Now let's start making stuff.

Level 2: Start

Level 2 begins at that all-important point when the company is real and you arrive for your first day of work. Oh yeah, congratulations on the new job. Celebrate, but then get to work. This is where you make your new job into a real job.

Start is entirely about creating both the product and the company - they will work together as one symbiotic machine that, ultimately, will solve a big problem for your market. The company and product are usually indistinguishable, and the founders are tasked with getting both off the ground at the same time.

This is also the level that everyone associates with the Hollywood version of startup. This is the daring young genius tucked into a dorm room under a hoodie level. This is the Mark Zuckerberg wanna-be level. The Shark Tank level.

Don't fall for any of that, because despite everything you've learned from television and the movies, this is the level at which you will most likely fail.


Join Teaching Startup Now

Teaching Startup is a free on-demand digital accelerator for entrepreneurs at any stage, from beginner to expert.

INTERACT with other entrepreneurs.

LEARN from other entrepreneurs.

THE STARTUP SHOW to keep you motivated.

Get started by entering your email address. You'll get an email which will guide you through the rest.

Email Address
Caveat: By joining, you'll opt-in to our weekly email update. It's valuable, and it's MailChimp, so you can cancel at any time with one click.

Risk is a word constantly uttered in startup circles. Everything about startup is risky. Starting a company is risky. Hiring people is risky. Taking a job at a startup is risky. Investing in a startup is risky. Bringing a new product to market is risky.

And on and on.

Yeah, well, to that I say, going to work for someone else is risky. Staying in a position longer than your skills are valuable is risky. Starting a family is risky. Buying a home is risky. Investing in stocks is risky.

Let's face it. Getting up in the morning is risky. It's fraught with risk.

Risk isn't something you avoid. It's something you anticipate, measure, manage, and conquer. In Level 2, we'll talk about doing just that.

Creativity, in my mind, is what separates great entrepreneurs from good entrepreneurs. It's not the single factor that's going to determine whether the startup is successful or not, but having it sure helps.

The product you have in mind when you first start building is not going to be the product you end up launching, and that product will likely be different than the one your customers want and ultimately buy. But wait, even once you start making sales, that product probably isn't the one that will rocket your company into the stratosphere.

They're all the same product, but you will pivot, adapt, advance, and evolve through an endless series of changes before you find success. This is where creativity is a must.

Furthermore, the company you start will go through similar shifts and changes and problems. You're going to need maximum creativity to deal with this.

Logistics are the opposite of creativity, in some sense, but they're crucial. They're the nuts and bolts of starting and running a company. This includes everything from incorporation to drafting share agreements to hiring to finding space to work to establishing processes and rules for how you want to operate.

Logistics are boring, unfun, and the bane of every entrepreneur, but they're important. No entrepreneur ever thinks they need an attorney close at hand until they run into their first legal issue. The same goes for employment agreements, sales contracts, and term sheet templates downloaded from the Internet.

Planning is where leadership first becomes a factor at a startup. I am a planning fanatic, and I'm also a huge proponent of creating backup plans -- Plan B, Plan C, and so on -- until I run out of letters at Plan Z.

You've got to plan your company's operations, growth, finances, and resources. You've got to plan your product and its feature pipeline and release schedule. You've got to plan your path to market, your metrics and goals, and how and when you'll react to your product's performance. You've got to plan your marketing campaigns, your sales pipeline, your pricing, delivery, maintenance, and support.

You don't have to plan your exit. And you shouldn't.

Execution follows planning. I put execution at the end of Level 2 because that's where the dreaming and idealism and newness of what you're doing wears off and execution becomes the single-most important metric that will determine the success of your company.

If planning is your map and execution is your engine, measurement is your compass. You never execute without a plan, and you never complete a plan without defining and documenting how you will measure the execution -- what means good and what means bad and what means scrap everything and start over.

You will fail at execution. A lot. Most of those fails are going to be OK and are in fact necessary, but too many of them in a short period of time can be fatal. Good planning, solid execution, and well-thought-out measurement will stave off those fatal fails for as long as possible.

When does Level 2 end and Level 3 begin? That's a very good question, as now the gates between the levels become blurry. Usually, a good marker is when the product is launched or when the company lands significant funding. At that point, Start is in the rear-view mirror and you're well on your way.

Read the entire Five Stages of Startup series:
Level 1: The Jump
Level 2: Start (You Are Here)
Level 3: The Journey
Level 4: The Grind
Level 5: The End

Read the entire Five Roles of Startup series:

Read the entire Five Funding Sources for Startup series:
Friends and Family

Read the entire Five Kinds of Startup series:

Read the entire Five Reasons for Startup series:
Common Good

Q&A + Comments
You must be logged in to participate in Q&A or post a comment.

Your Email Address
Leave it blank to be anonymous
Your Thoughts?

How To Find a Problem For Your Solution
In Episode 6.7 of The Startup Show, we talk to NeuroPlus founder Jake Stauch about how his amazing brainwave tech struggled to take off until he found the right problem for his solution.

Tatiana Battles the Big Boys
In Episode 6.6 of The Startup Show, we discuss the challenges of taking on entrenched players in retail with Mati Energy founder and CEO Tatiana Birgisson.

Entrepreneur Isn't a Job
In Episode 6.5 of The Startup Show, we talk about how people who aren't entrepreneurs rarely understand what entrepreneurs do, let alone respect what we do. But it's also rare that they love what they do as much as we do.

How to Start a Company Outside of Silicon Valley
In Episode 6.4 of The Startup Show, we're kind of done with all the thinkpieces coming down from on high pleading that every startup ecosystem that isn't Silicon Valley should stop trying to be like Silicon Valley.

When Being an Entrepreneur Stops Being Fun
In Episode 6.3 of The Startup Show, we discuss every entrepreneur's responsibility to walk the fine line between having fun and making money. Startup should be a blast, but at some point, you have to start chasing revenue. Here's how.

Pick a Topic
Get Educated

Teaching Startup has lessons -- written, video, and audio -- covering 25 important foundational areas of startup: Stages, Roles, Kinds, Funding, and Reasons.

Each lesson on the site covers at least one and up to five of these areas. Pick and choose what you need to know and how you want to learn it.

Click here. Choose a topic. Read, watch, listen, and learn