Five Stages of Startup: Level 3 -- The Journey

Leadership, Making, Hiring, Funding, Customers
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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.

So far in this series, I've covered the first two of five stages that make up a generalized startup timeline, beginning with Level 1: The Jump. This is the period of time before the thing is actually a thing -- when it's just a great idea that will become a great product. After that, the startup moves to Level 2: Start, when the company is formed, it figures out how to operate, and launches that great product.

Now we embark.

The Journey begins when the startup looks, acts, and feels like a real company. There is a product or service out there on the market, and customers are now the most important factor in determining success.

The Journey is the best part of startup. It's the early days when there are few rules and everything feels new and fresh and within your control. The Journey can last a few weeks, a few months, or a few years. Enjoy it. It's why you did this.

But the journey can't last forever, and you can't coast through this level. You're building on what you've accomplished and driving forward at top speed, trying to perfect the product, sell the product, grow the company, and scale the operation. Here's what you'll need to do that.


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Leadership is a tough concept to get your brain around. It's one of those terms where you're pretty sure you know what it means until it's required of you.

In startup, leadership means laying out the vision for both the company and the product -- not just for the next few weeks, but for the next few months and the next few years. You'll need to clearly define the path that leads to short-term, medium-term, and long-term success. You'll also need backup paths, and you'll need to know when and how to jump off the main path and onto the backup.

Leadership means telling people how to navigate those paths, but it's more than shouting orders. It's up to the leadership team to get everyone working toward the same goals, by clearly explaining those goals, dividing up tasks, and handing out assignments.

And leadership means making tough decisions, living by them, and taking the blame when they don't work.

Making is another concept that sounds simple until you start doing it. Whether your product is a piece of tech, a piece of machinery, or a piece of clothing, making is more than constructing the item. You'll need to figure out how to make the best item on the market at a cost that comes in under the price your customers are willing to pay. And you'll need to keep improving it.

Yeah. It's a lot.

You'll need experts, or people who can quickly grow to be experts, to build your product. You'll need ongoing research to make sure your product is better than the competition and stays that way. You'll need to spend a bunch of money to get a prototype built and a production run off the ground. And of course you'll need to plan every release while reacting to all the things that will go wrong along the way.

Hiring is one of three pillar concepts, along with Making and Funding, that will take the vast majority of your time at this level. In order to make your product and grow your company, you'll need people -- and not just any people, but the right people.

Hiring the wrong people is the quickest way to sink the company.

There's a ton of stuff to cover here, from company fit to salary to options and ownership. Then you've got to keep those people happy and grow their careers as you grow your company. You'll also have to fire at least one of them at some point, which is the hardest thing you'll ever have to do as an entrepreneur.

Funding can come from anywhere, especially at this level, and that's an important concept to keep in mind. A lot of people associate funding only with venture capital. This should never be the case.

If you really want to make a run at starting your own company, you should be heavily invested in it, in time, in reputation, and definitely in dollars. The more you can invest in your own company, the more of it you will own, because you won't have to hand chunks of it out to investors and hires.

These days, it's getting easier to find and land outside funding, but now more than ever, you have to be extremely careful about the promises you make and the deals you negotiate.

Customers, from this point in the life of your startup until the very end, are going to be the only thing that matters. You can raise a ton of money, you can assemble a genius team, you can build the world's best product, but if you can't find, land, and keep customers, then you're sunk. End of story.

You'll hear the term “customer-first” quite a bit in startup. This is not just some slogan, it's the first, last, and only thing you should be thinking about. Your funding should be driven by revenue from your customers. Your product should be built on feedback from your customers. Every decision you make from this point on should be made for the benefit of your customers.

But here's one of those secrets of startup you won't hear very often: The customer ISN'T always right. And it'll be up to you to decide when they're right and when they're wrong.

The graduation line between Level 3 and Level 4 is blurry, because it's the first jump from level to level that is entirely out of your control.

How and when you move from Level 1 to Level 2 is all up to you. You'll still pull the trigger to move from Level 2 to Level 3. Going from Level 3 to Level 4, however, will be determined by the customers coming in and the money that they spend.

Level 4 is also when the seas get a little more choppy, and momentum starts building towards the end (Level 5). You'll need all the skills described above and more to navigate your way through it.

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

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