What are the 5 stages of startup development and how to make the most of them

From this article, you’ll get to know about five stages of development that nearly any startup needs to go through. This information will enable you to improve the performance of your business and increase your income.

Startups from nearly any sphere go through five stages of development. The better you understand the essence of each phase, the easier it is for you to make the most of it. In this article, you’ll find a brief description of each startup development stage and tips on enhancing its efficiency.


While researching your business idea, you should focus on four key components: company, customer, competitor and collaborators. Don’t start to build anything before you finalize the research.

  • Compile a list of experts who you would like to interview.
  • Get a clear image of your target customers and think about which of their demands you could meet better than anyone else.
  • Analyze the products, strategies, competitive edges and weak points of other companies from your sector.

No matter how many competitors you have and how successful they are, you can always find gaps — something that no one has offered to the audience yet.

Create an MVP

This acronym stands for Minimum Viable Product. It is a must-have set of features that enables you to test your product with your target audience without any complex engineering. Your goal is to spend minimum effort and gather maximum feedback. Thanks to an MVP, you’ll be able to assess the practical impact of your product in real life and improve it according to the comments and reviews of your target audience.

  • To create your MVP, you should define your timeline first. There are no universal time frames that would suit any startup. Your timeline will depend on the size of your team and the specific features of your product. First, you need to build your product, then measure the results and then gather feedback.
  • Some entrepreneurs believe that they can do without an MVP because their budgets are too limited in the initial stages of startup development. But that is an entirely wrong approach. If you can’t afford to hire an in-house team, you can outsource creating the initial prototype. If you like how the outsourced provider worked, you can either keep collaborating with them or recruit your own team.
  • If your budget permits, you might want to hire a CTO responsible for MVP creation. That would be an optimal approach for startups that require dedicated tech expertise.

While working on your MVP, try to ask as many questions as you can. Conduct user interviews and carry out surveys. Don’t just wait for your team members and potential customers to give you the right ideas. Save the feedback in a well-structured format, come back to it regularly and rely on it when fine-tuning your product.

Get Traction

The term “traction” denotes the stage when all the components of your startup begin to function as a well-coordinated mechanism. To kickstart this process, focus your attention on the following three aspects.

  • Catchy branding. To make your product recognizable across the target audiences, you should give it an identity.
  • Promotions. Don’t try to promote your product to the widest possible audience. Instead, strive to attract the attention of your target audience. Use several promotional channels simultaneously.
  • Partnerships and referrals. Remember: people tend to trust recommendations more than ads. Search for those who can help you to spread the word about your brand and products. Build a rewards program for them.

As soon as traction appears, you’ll acquire your first customers. They will be likely to remain your most loyal ones for many years. Never miss your chance to get feedback from your clients and keep on consistently expanding your customer base.

Final Improvements

You can understand that your startup has reached this stage judging by the number of its customers — it should be increasing. Talk to your clients and try to get to know what they love the most about your product. Get rid of features that don’t convert and invest more in promoting your killer features. Hire professionals that can help you enhance the strongest aspects of your brand. Your ultimate goal is to expand the value that stands behind your product as much as possible.

Aim for Maturity

On average, it takes a startup around 3 years to become an established business. No matter which growth strategies and hacks you apply, you shouldn’t expect instant results. If you want to reach maturity quickly, focus on the following key aspects.

  • Measure your KPI and ROI. Install profile software that will enable you to assess your efficiency. Modern apps will help you to optimize your workflow and allocate your resources more rationally. They will generate insightful reports to monitor your performance and, probably, come up with smart suggestions (especially if you opt for AI-powered software).
  • Attract funding. To launch their startups, many entrepreneurs use their own savings and borrow money from their friends and relatives. If you realize that it’s not enough, don’t try to compromise on the quality of your product — instead, you should attract external funding. You might consider traditional term loans or business lines of credit. Otherwise, you might try to attract investors — who, by the way, can provide you not only with money but also with helpful advice. When deciding which source of funding to use, you should take into account the maturity of your startup, its history and current valuation.
  • Research partnerships that could give you revenue growth. For instance, you might look out for partners that can help you to cut down operational costs. Or, probably, third-party experts will enable you to automate your business processes. And of course, you’ll benefit from joining forces and budgets for marketing campaigns.

Once your business reaches maturity, you should never rest on your laurels. The market keeps permanently evolving. You should keep up with the industry trends and adjust your business to them.

Final Thoughts

Hopefully, this information helped you to get a better vision of the five startup development phases. These recommendations will come in especially handy for entrepreneurs whose experience in launching businesses is not too wide yet. Think strategically, behave proactively and regularly measure your efficiency!


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