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5 Stages of a tech startup – Stage 1: Product Development

There are many ways to plan the growth of your tech company. One way is to split start to exit period in to 5 stages, these being: product development, product/market fit, launch, growth and dominance. And each of these stages can be further split into five key components, these being: milestones, team, product, funding and metrics.

Product Development

This stage runs all the way from the initial idea to setting up of the company, coding of your product, moving the product from alpha to beta and launch, building your initial team and raising the funding to sustain the operations, either through savings, credit card debt or through angel or venture funding.

In terms of milestones, the product should function as intended and achieve early traction before you can move to the 2nd stage. Whether this is 100 users or 30,000 users, is really your call. No one other than you will know what the right number is.

5 Stages of a tech startup - a template

During this stage, your initial product team needs to be in place. Depending on the capital invested, this could well be from sole founder to 5 to 10 staff. In most cases, you may find this stage is filled with 2 to 3 co-founders. Vital skills at this stage are product development and ability to engage with users to refine the product.

In terms of the product, it should not stop at simply providing the functionality, but should extend to applications, i.e. how the product is applied for specific use cases.

How much funding you needs or how to obtain this is anyone’s guess. This stage is generally treated as seed funding, and its a good idea to start speaking to suitable investors at very early stage, even if they may not be interested until you move through this stage. You may well decide to fund yourself rather than giving up lot of equity – there is no right or wrong universal solution to this – what works for you at the time based on your circumstances is the best way to decide whether to raise external capital or not. Once decided stick to it – if you are going to raise funding, you need to allocate significant time to it, and do not approach this half-hearted! Stick with the gut feel!

Metrics could well be number of users signup, level of engagement, etc measured on monthly basis. There are plenty of books written on lean startup methodologies and cohort analytics. Its also a great idea to engage with local techstartup groups to learn from your peers.

Just few thoughts that came to my mind whilst reviewing our 5 stage planning. Hope you find above of some use.

Here is a simple template you can use.

Published inedocr.comPlanning