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Hitesh Porwal

Certified Executive Coach

29 September2019

5 Stages of a Startup - Where does your startup stand?

Like every living thing on the face of this planet, businesses have their end-to-end lifecycles as well. And a start-up is no exception to this rule.

There are five distinct stages that every start-up - by and large - has to go through. While the amount of time that a particular start-up will dwell on a stage varies, what is expected of the entrepreneur in each of the stages, and the associated emotional roller-coaster ride remains constant.

If the Start-up Genome Report – that was released last year – is anything to go by, most start-ups fail primarily because of self-destruction. Blame it on certain bad choices made by the founders or lack of preparedness on their part, it was mostly these factors that played a decisive role in the start-ups’ undoing; and not ‘bad luck’ or adverse market conditions.

This is exactly why knowing the stage you’re at helps on two counts. First, you have a clear idea of what is expected of you. This will help you act accordingly. Second, you get the time to prepare yourself for what lies ahead.

More importantly, it helps you steady your emotions, exercise patience and come out of that stage with great fortitude. After all, you wouldn’t want to quit if you knew that success is just round the corner, right?


Stage#1: Ideation

At this stage, a start-up garners opinions and advice (from as many sources as possible) about the viability and potential of its business idea. As an entrepreneur, you nurture a business idea that typically emerges from an innate, personal need and deep understanding of the particular industry you’re involved with.

Generally, the ideation stage is a year to the intended date of launch.


Stage#2: Launch

Once you have tested the business idea and are sure to press ahead with it, it is then time to make it official and launch it. Celebrations are in order! You have finally launched your website or opened your store.

However, bear in mind that this is just the beginning. Getting an A in 1st standard doesn’t guarantee a place in Harvard.


Stage#3: Validation and Decision

This stage is where the maximum work occurs. You try to figure out the problem-solution mix and the product-market fit. You finally start getting clarity of the kind of lifestyle, customers and challenges you’d be dealing with running this kind of startup. At an emotional level, if you think you don’t like what you signed up for, this is the time to quit.


Stage#4: Growth

At this stage, your business should be generating a consistent income and taking on newer customers regularly. Cash flow should look up as well, considering recurring revenues start to pay for overheads and other ongoing expenses.

Thank God! What you stood for was worth it. However, a big challenge at this stage is dividing time between a range of demands that require your attention – managing increasing revenue levels, attending to customers’ demands, tackling competition and making space for an expanding workforce.

Simply said, now is the time to put your managerial and leadership skills to the test.


Stage#5: Transition

Having successfully navigated the expansion stage, your business should be registering stable profits year-on-year. At this stage, you would be faced with two options – pushing for further expansion or exiting the business.

If risk-taking is the oxygen of your life, you’ll sell your business and move onto the next startup.



Of these 5 stages, which best describes the current situation of your business? No matter where your business is, remember these rules set in stone:

  • Don’t cut corners in providing exemplary customer service. Your first few customers are going to do word-of-mouth marketing which is super crucial for your growth.
  • Remember that you are unique and the solution that you provide should be unique as well. Don’t get into the trap of unnecessary competition. Differentiate. Differentiate. Differentiate.
  • Don’t accept a longer than usual delay in generation of cash flows


Hitesh Porwal is a certified executive coach based out of Mumbai. He runs a 6-week Entrepreneurship E-Lab coaching program to provide clarity on the most important question for aspiring entrepreneurs ‘What kind of start-up or business can I start?’. It is a completely online and live coaching program conducted on zoom. You can find more about the program at