Dr David Bozward

Category: Enterprise Creation

  • 6 Stages of the Startup

    6 Stages of the Startup

    When we work with start-ups its important to provide an assessment on their journey within the startup lifecycle. Understanding where a startup is in their lifecycle allows us to assess their progress, providing mentoring to the founders and also provide a vision. The startup lifecycle is made of 6 stages of development, where each stage is made up of levels of substages, allowing for more granular assessment which helps pinpoint the main drivers of progress at each stage.

    1) Discovery (or Pre-Seed)

    Goal: This phase is all about discovering and validating whether you are solving a meaningful problem and whether anybody would “hypothetically” be interested in their solution.
    Milestones: Founding team is formed, many customer interviews are conducted, value proposition is found, minimally viable products are created, team joins an accelerator or incubator, Friends and Family financing round, first mentors & advisors come on board.
    Management Team : Founder(s)
    Funding Requirements : £500 – £5,000 (always depends on the business type and technology requirements)
    Business Development Milestones : Validated Problem and potential solution
    Typical Funding Resources : Cash
    Average Valuation : Nil (Typical Technology Start-up)
    Time: 3-6 months (average for all types)

     

    2) Seed

    Goal: Development of a minimum viable product which can be shown to potential customers, sponsors and customers.
    Milestones: Founding team is formed, many customer interviews are conducted, value proposition is found, minimally viable products are created, team joins an accelerator or incubator, Friends and Family financing round, first mentors & advisors come on board.
    Management Team : (Core team) Founders, co-Founders, Mentor,
    Business Development Milestones : Letters of intent or some preliminary relationships
    Funding Requirements : (Seed Capital) £10,000 – £50,000
    Typical Funding Sources : Friends and Family financing round, first mentors & advisors come on board
    Average Valuation : £10,000 – £100,000
    Time: 5-12 months (average for all types)

    3) Validation

    Goal: The Startup is looking to get early validation that people are interested in purchasing their product through orders or pre-orders with deposits.
    Milestones : refinement of core features, initial user growth, metrics and analytics implementation, start-up funding, first key hires, pivots (if necessary), first paying customers, product market fit.
    Management Team : (Entrepreneurial Lieutenants) At least one real manager, Founders, Mentors and Advisors
    Funding Requirements : (Startup Capital) £100,000 – £300,000
    Typical Funding Resources : Business Angels, Grants,
    Business Development Milestones : Paying Customers
    Average Valuation : £1m
    Time: 9 months – 1 year

    4) Established / Efficiency

    Goal: The company refines the business model and improves the efficiency of their customer acquisition process. The business should be able to efficiently acquire customers in order to avoid scaling with in-effective processes.
    Milestones: value proposition refined, user experienced overhauled, conversion funnel optimized, viral growth achieved, repeatable sales process and/or scalable customer acquisition channels found.
    Management Team : (Risk takers) At least three real managers, Founders, Mentors and Advisors
    Funding Requirements : (Venture Capital) £300,000 – £500,000
    Typical Funding Resources : Venture Capital
    Business Development Milestones : Profitable customers, Strategic Partners
    Average Valuation : £3m
    Time: 1 – 3 years

    5) Scale

    Goal: Startups step on the marketing drive and drives global growth very aggressively.
    Milestones: massive customer acquisition, back-end scalability improvements, experienced executive team formed, process implementation, establishment of departments.
    Management Team : Executive Board, Management Board, External Advisors
    Funding Requirements : £1.2m – £5m
    Typical Funding Resources : (Bridge Funding)
    Business Development Milestones : Historical results against plan, Focused Business Plan, Strong Processes and Controls,
    Average Valuation : £3-15m
    Time: 3-5 years (average for all types)

     

    6) Sustain

    Goal: Develop a portfolio of customers and products, either based on one technology or a set.
    Milestones: diversification of customers and revenue streams, agile product teams, public and investor relations
    Management Team : Executive Board, Management Board, External Advisors, Product Teams
    Funding Requirements : (IPO) Large A Round
    Typical Funding Resources : IPO
    Business Development Milestones : Multiple Revenue Streams,
    Average Valuation : £10-30m

  • The Three Stages of Entrepreneurship

    The Three Stages of Entrepreneurship

    The process can be easily split into three stages: Thinking, Doing and Growing.

    Thinking about Starting

    The start-up phase is thinking, making plans, developing the right motivation to start and develop the aptitude to be an entrepreneur. For some people this is the hardest part and they struggle to choose an idea, develop the idea past just that and get other involved in making the idea reality. The majority of entrepreneurs never had the luxury to have to sit down and brainstorm ideas, then using innovation techniques decide on the best idea and then market research which one of the shortlist to take forward to a business. I still believe in the ‘gut instinct’ method, if you don’t have the guts to make the decision you want to take forward, then you don’t have the guts to make it work, so stay and get yourself a job in someone else’s business.

    Doing a Startup

    The doing phase is the hardest, it’s the one all the famous entrepreneurs don’t talk about, it’s the part where you spend 18 hours a day, 7 days a week making this business inch forward to some form of success. In this stage you need to start to build relationships with your staff, your bank, your suppliers and your customers. This relationship has to develop a trust and a strong bond which allow everyone to understand who they are and what value they provide into the business model. If someone doesn’t understand this then they will become the weakest link in your business.

    Growing a Startup

    The final stage is growth, personal growth, business growth, network growth and sales growth. This stage is normally post 36 months and it’s the point where the business model and relationships with suppliers is well established. The bank actually like and trust you. The most important part of this stage is to figure out ‘what type of entrepreneur you are?’ and what you can and cannot do, what you want and do not want to do. The things you don’t want to do, hire someone better that you. The thing you want to do and no good at, then develop some skills, in fact you will need to develop skills anyway. Knowing yourself will ensure your business has a solid foundation.  In this stage you need to develop stronger bonds with your local community as you require more employees, more space and more flexible and understanding relationships with those around you.