You have a great idea for a new product that could make millions. But unless you’ve done this before, you may not know how to take that idea and turn it into reality. There’s more to the startup process than simply building a prototype in your garage and releasing it to the public. 

If you aren’t starting with deep pockets, you’ll need to be able to prove to potential investors why they should take an interest in your fledgling business. For most entrepreneurs, the best plan is to follow the tried-and-true startup stages listed below. During each phase, you’ll focus on developing and honing your product with a method that investors will recognize and trust. 

Distracted by the complexities of startup financial management? Let the startup bookkeeping experts at Zeni stay on top of your finances so you can concentrate on building a product you’re proud of. Schedule a demo here. 

6 Startup Stages: What To Do To Bring Your Product To Market

1. Ideation Stage

The first stage is where you focus on answering the what, why, and how questions: what problem you’re trying to solve by developing the new product, why the problem needs to be solved, and how you’re going to solve it.  

Depending on your background and whether you've actually faced the problem yourself, you might already be in a strong position to come up with ideas, develop a product, and explain your answers to the above questions in a way that will satisfy potential investors. If not, it's time to study up.

This starting stage is the ideal time to research the kind of team and resources you’ll need to build the product and how these resources might impact your future business costs. You may not be able to make accurate predictions at this point, but it’s a good idea to get into the habit of tracking your expenditures compared to your expected revenue even before it becomes critical to your day-to-day operations. 

If you have clear ideas about what your product will do, why it is essential, the resources you will need to develop it, and how to turn your vision into an early prototype, you will be much more likely to secure seed-stage investors who can help you get off the ground. 

2. Minimum Viable Product (MVP) Stage

What is the bare minimum version of the product that can be used to solve the problem once it’s built? This is the question to focus on during this second stage. Once you’ve determined the answer, it’s time to build that MVP.

Investors may fund this round to help you develop and build the first, barebones version of your product. This stage is also an appropriate time to apply for accelerator programs such as Y Combinator, 500 Startups, and similar services where they take a percentage of equity in the business in exchange for allowing the business to be part of the program. 

Additionally, look into PPP programs or other government grants for startups. You may not qualify, but gathering that information for future reference is never a bad thing. 

3. Early Launch Stage

Once you have a minimum viable product version built, you can release it to a very small segment of customers to get their feedback.  Don’t think too big during this startup phase. Choose four or five trusted people with whom you have a history, and fill them in on what you’re trying to accomplish so they understand the product in its ideal form.

After your initial customers have had a long enough time to fully test all of the available features, return to them and ask: 

  • How are you using the product?
  • Does the product solve the intended problem?
  • Do you see any problems with the product?
  • What are some of the most impactful benefits you’ve experienced so far?
  • Might the product have a wider (or different) application than originally intended?

Use your preliminary feedback from these early customers to make improvements.

This is also the ideal time to expand your testing and research efforts. With the first customer stories coming in, you can increase the scope of your testing and monitor for any issues that happen more than once. 

4. Product Market Fit Stage

As you progress through these iterative improvements and gather confidence in your product, you can begin to slowly release it to a wider circle of customers. If you started with five, for example, release it to ten, fifteen, twenty, or more depending on how the product is performing. 

Once you have 100 people who enjoy using the product and find value in it, then you know you’re on the right track toward building a solution with real potential to be successful in a wider market. One good indicator is whether your customers stop using the product after the demo phase ends or whether they happily continue using it in their daily lives.

If customers have stopped using your product, this signals something isn’t working optimally. It is important to ask these customers about their experiences and find out why they aren’t reaping the benefits they may have hoped for when they signed up. 

Gathering and acting upon this feedback is perhaps even more important than receiving entirely positive, encouraging feedback. It is highly unlikely that all will be perfect during these early stages, so expect to spend some time responding to issues, revising features, or perhaps re-envisioning your product from the ground up. 

It may feel frustrating to get stuck in this phase for longer than you expected. But taking the time to polish and refine your users’ experiences often makes the difference between an ultimately successful business and one that flops after an early release performs poorly. 

Remember, it is much easier to improve your product and rebound during this stage than it would be to clean up unexpected messes and deal with a bad reputation if you went ahead with a wide launch before your product was truly ready. 

As you might expect, later-stage investors will be much more intrigued by your business if you can demonstrate that your product has a valid place in the market. Bring this information to investor meetings so you can explain in detail why potential funders can expect a healthy return on investment for their confidence in your startup. 

If you want to learn more about how to determine when you’ve achieved product market fit, we recommend this resource written by the CEO of Superhuman. 

5. Official Launch Stage

You’ve built your product, gathered early feedback, improved features, and landed a few loyal customers, proving that your product works and solves the intended problem. Additionally, you have low customer churn, meaning the customers that have started using your product clearly enjoy using it. This signals that you have achieved product market fit.

Now is the time to make your product available to a wider market and see how it performs. Marketing efforts become more important in this stage and the next. Customers need to know about your product if they are going to use it to make their lives easier. 

6. Growth Stage

During this stage, focus on increasing your customer base. If you have diligently continued to develop and improve your product during the previous stages of startup development, it’s likely that you will experience some growth at this time. 

Don’t stop improving your product now, however; the development process is never really over. Even after your product has been successful for years or decades, there is always room to improve on existing features, add new features to address emerging problems, and streamline the customer experience. 

As your product matures, let Zeni help you keep an eye on your startup’s financial health. 

As a business owner, you not only have to stay on top of your day-to-day bookkeeping tasks, you also have to closely monitor your margins and make sure each new feature you implement remains financially viable. If you’re not a finance expert, it’s nerve-wracking to report your progress to investors. Wouldn’t it be nice if you had a team of experts to help you handle the complicated parts of managing your company’s finances? 

That’s exactly what Zeni’s CFO Services can do—provide peace of mind to both you and your investors that your finances are being managed well. Your dedicated finance team will guide you through building a financial plan that you can feel confident bringing back to your investors every time. 

Schedule a demo to see how it works.

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