Stages

1

New Venture
2

Early Growth
3

Rapid Growth
4

Continuous Growth

Find a Viable Business Model

  • The business idea or concept is unproven.
  • The company is learning and experimenting, in search of “what works,” and may change its business model multiple times.
  • Focused simultaneously on developing a product and finding a market.
  • Operates at a rapid pace and faces tremendous pressure to succeed quickly.
  • Needs to make fast decisions, iterate quickly, and make changes when needed.
  • Decision making is highly centralized.
  • The founders are at the center of everything and are directly accessible by all employees.
  • Typically employ a small and dedicated group of employees who share the founder’s vision.
  • No formal management structure because of the limited number of employees.
  • There is a great deal of uncertainty; there is almost daily change and nothing ever goes as expected.
  • Has few systems or policies and operates informally with a lot of improvisation.
  • Very little active planning or need for planning.
  • Sales serve to measure market acceptance.
  • Communication is informal and frequent.
  • Nothing is written in stone, and there is a high degree of flexibility.

 

Create Customers & Drive Sales

  • The company begins this stage with a basic product, some revenues, and a few initial customers.
  • Broader market acceptance is unproven; it lacks scale; and its infrastructure is not developed.
  • Product development and customer development is taken to the next level.
  • The business is primarily focused on revenue growth. Almost all of the energy of the business is directed toward acquiring and satisfying more and more new customers.
  • In an early phase of building a formal management structure. Teams are small, loyal and cohesive.
  • Fast-paced, highly flexible, and often very chaotic. Able to turn on a dime with constantly shifting priorities.
  • A lot of improvisation and a freewheeling management style.
  • Action oriented and driven by attaining results.
  • Everyone is expected to do whatever it takes to meet customer demands. High levels of initiative are rewarded.
  • Ambiguity and imprecision are always present.
  • The business operates in a relatively simple environment.
  • Decision making is highly centralized. Hands-on leadership – the owner/founder is involved in every major decision and activity.
  • Very minimal systems and processes are in place. The systems and processes that exist are often improvised on the fly.
  • Employees are a mix of specialists and multi-talented generalists with job responsibilities that are rarely defined and rarely stay the same.
  • Success isn’t yet scalable, repeatable, or sustainable. The organization reinvents the wheel every time a wheel is needed.
  • Wildly optimistic attitude. Morale is high. Family like culture.
  • Says “yes” to almost every opportunity and opportunity seems to be everywhere.
  • Everyone is busy doing, so there is little time for planning and thinking.

 

Scale the Company

  • The company has a proven product in a high-growth market.
  • Demand for the company’s product or service is rising quickly.
  • While it is no longer an early stage business, it is not yet a large company.
  • Emphasis is placed on the development of the organization and operations.
  • More sophisticated systems and processes are added.
  • A talent-hungry organization with a lot of people being added, making recruiting, onboarding, and ongoing management more difficult.
  • The company transitions to functional departments and jobs become more specialized.
  • The business is focused primarily on profitability.
  • Tension exists between the need to grow rapidly versus the need to build structure, plans, process, and systems.
  • The sheer volume of decisions to be made has dramatically increased.
  • Early success has attracted new competitors.
  • There are increased expectations from all stakeholders (board, investors, employees, customers).
  • Turnover may dramatically increase as the business changes during this stage.
  • Management of this stage is very difficult. It is the time of the greatest organizational, operational, and mindset changes.

 

Become a Market Leader

  • The company is succeeding on a large scale and has become or has the potential to become a market leader.
  • The organization is much larger and more complex and has developed a structure that supports its increasing size.
  • The business operates with precision, dependability, and efficiency.
  • New growth strategies are being considered or executed: new markets, new products, new businesses, acquisitions, strategic alliances, IPO, etc.
  • Changing customer needs, new technologies, and competitive threats present increasing challenges.
  • The business is focused on both long-term revenue growth and short-term profitability.
  • There is a balance between the systems and controls needed to effectively manage the business and the flexibility necessary for entrepreneurship and innovation.
  • Entrepreneurship is a mindset and cultural component throughout the organization.
  • The right people are in the right positions.
  • Decisions are made at the most appropriate level of the organization and consistently implemented.
  • Goals are readily set and consistently met or exceeded.
  • Everyone in the organization – from top to bottom – has a strong sense of accountability towards his own responsibilities and his team’s responsibilities.
  • Short-term tasks are done and done well, while simultaneously never losing sight of the big picture.
  • Success is scalable, repeatable, and sustainable.
  • The organization is unified and aligned around a shared vision. Everyone in the business embraces and acts on a shared mindset.
  • There is minimum disruption in the way the organization deals with problems – problems are confronted head on and then the business moves on.
  • Relationships between departments, employees, and managers are very strong. There is a high degree of trust, teamwork, and collaboration.
  • There is a strong sense of ownership by all employees.
  • The organization accepts change and adapts quickly to new challenges.
  • There is an underlying focus on the company’s top priorities and goals.
  • Discomfort with the status quo, enthusiasm for new challenges, penchant for long-term thinking, and flexibility.