The 6 Startup Stages Entrepreneurs Must Face

by / ⠀Startup Advice / March 29, 2022

As far as I can tell, there are six stages in almost every startup life cycle. But to get to the last stage — a successful exit — founders have to overcome a lot of hurdles. They must solve a real problem for their customers, scale successfully and have the right people on their team first.

Here are the six phases most startups go through — and a few challenges you can take to see if you’re really ready to take that next step forward:

Stage 1: Desire

If there is one thing that all great founders share, it’s that they have an insanely strong desire to solve problems and make a dent in the universe.

People like Jeff Bezos (Amazon) or Muhammad Yunus (Grameen Bank) started their companies because they ran up against problems that ate at them day in and day out, consuming their every thought until they had no choice but to quit their job, put everything else aside and solve these problems.

Don’t start a company  because you watched “The Social Network” and you think it would be cool to be the next Zuckerberg. In all fairness, there is nothing wrong with wanting to get rich, but if your main motivation is accumulating wealth, there are many less circuitous paths toward this end.

Challenge:  Next time you give your elevator pitch, spend the first 15 seconds explaining the problem before you start pitching them on the solution.  If the person is not moved by the significance of the problem, chances are you’ve created a solution for a problem that doesn’t really exist.

Stage 2: Inquire

Once you’ve discovered a problem you are passionate about fixing, it is up to you to inquire and learn as much as possible from people who have been in your shoes. Go to meetups, listen to speakers at StartupGrind, volunteer at events like Startup Weekend or Lean Startup Machine.  Get engaged with the local startup community.  During this period, share your idea with everyone you meet (don’t worry about them stealing your idea) and seek out a mentor or two who is willing to coach you along this journey. No one succeeds without receiving help from others. Smart founders make use of the resources around them.

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Challenge:  Find the email address of a successful entrepreneur you admire and email her.  Start a dialog by asking a succinct, one sentence question that she can answer in one minute or less.

Stage 3: Be On Fire

As my dino friend @FAKEGRIMLOCK says:








If you expect to change the world, you need to be on fire.  Passion is the fuel that feeds this fire.  Your startup is your baby.  And like a real baby, it WILL consume every waking minute of your day.  If you are not obsessed with your startup 16 hours a day, seven days a week, your fire is not burning bright enough.

The flip side of being on fire is that everything else in your life takes a backseat to your startup.  There is simply no physical or emotional energy left over for anything else.  In the first few years of your startup, you end up sacrificing relationships with friends and people you love.   You stop exercising.  You have no regular paycheck so you start eating junk food because it’s all you can afford.  The idea of a normal dating life goes completely out the window.  Basically, the well-rounded, interesting person you once were ceases to exist. For better or worse, the new you is a stressed out, unhealthy, emotionally unstable robot with a single track mind to change the world.

Challenge: For the next 30 days, don’t call or hang out with your friends or family, and spend no more than $10 per day on food, transportation, and entertainment. This is what life will be like for the first 12 to 24 months of your startup.

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Stage 4: Hire

The company with the smartest people  wins.

At a certain point, you will have found product-market fit (hooray!) and it will be time to scale your company. From here on out, everything comes down to execution execution execution. Execution starts with finding the best talent.

The common refrain when it comes to hiriing is that smart founders always hire people that are smarter and more capable than themselves. As someone who is admittedly not very smart, I absolutely, 1000 percent agree with this statement.

But recruiting smart people is not enough. It’s equally important to recruit people who think differently than you do and who are going to challenge your ideas. This raises the bar for the whole company and pushes everyone in the company  to achieve at a higher level.

Challenge: Before hiring anyone, ask yourself, do I believe this person can take X responsibility off my plate and do it 10 times better than I could do it myself?  If the answer is no, they are not the right person for the job.

Stage 5: Inspire

Once you have great people on your team that you trust completely, you stop shouldering as much of the day-to-day work, and your main role shifts to inspiring your team to produce at a level beyond what they thought was possible.

To use a sports analogy, your goal is to move from player to coach.  More specifically, you need to become Phil Jackson.  Jackson won 11 NBA championship rings as the coach of the Bulls and the Lakers. Of course his championship teams started with an incredibly strong core of talent (Jordan, Pippen, Shaq, Kobe), but they didn’t win on talent alone.  And they certainly didn’t win because Phil was calling all the shots from a tactical standpoint (Jackson was notorious for not calling timeouts when his team was going through a rough patch, but instead trusting his players to figure it out).  Rather, the secret to Jackson’s 11 championships was able to get the most out of his players. He knew how to get inside his players’ heads.  He inspired them and empowered  them to be the best players that they could be.

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Challenge:  Are you more Phil Jackson or more Michael Jordan?  Do you trust people to take the big shots or do you feel the need to take all the shots in order for your team to win?  If you still feel the need to take all the shots, you may have hired the wrong people.

Stage 6:  Get Acquired

When you’re raising capital, one of the common questions you get from VCs is, “Who is going to acquire you?”  The answer everyone gives is “Google, Facebook, (maybe AOL if this was 1996).”  The real answer, of course, is, “Who knows?”

Getting acquired is partly outside of your control and focusing on it too much at the early stage may be putting the cart before the horse.  The best piece of advice I’ve ever received from someone who has sold their company is this: Build a company that solves a real problem, delights your customers, and has a strong P&L.  

If you do these things, someone will want to purchase you — or you’ll have a job for life.

A version of this post originally appeared on the author’s blog.

Ethan Austin is the co-founder of GiveForward and the author of the popular blog, Startups and Burritos. You should read it. It’s pretty awesome. He loves family, startups and burritos.

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.

Related Post: 13 Quotes and Places to Hear the Story of Under30CEO

About The Author

Matt Wilson

Matt Wilson is Co-Founder of Under30Experiences, a travel company for young people ages 21-35. He is the original Co-founder of Under30CEO (Acquired 2016). Matt is the Host of the Live Different Podcast and has 50+ Five Star iTunes Ratings on Health, Fitness, Business and Travel. He brings a unique, uncensored approach to his interviews and writing. His work is published on, Forbes, Inc. Magazine, Huffington Post, Reuters, and many others. Matt hosts yoga and fitness retreats in his free time and buys all his food from an organic farm in the jungle of Costa Rica where he lives. He is a shareholder of the Green Bay Packers.


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