Life Cycle Of a Startup : Entire Journey Explained


Startup is a very fascinating word for the millennials and everyone wants to have one of their own. However only few of the startups survive to really serve the customers. The startup initiation begins with an idea to solve problems of people or a class of the society. By targeting them, the startup earns and diversified and expands into a big company. The entire journey is divided into various stages. Let’s understand the stages of a startup. 

Startup Stages

Identifying a Problem

It all begins after identifying a problem of many people. Of Course the problem should not be limited to a few or else the customer base would be limited since the inception only. So identifying a basic problem and solving it is the base of any startup. Startup not only means that a unique product is required or a unique business needs to be adapted. It’s primary goal is to solve the problems of customers in the most easy and affordable ways.

Hence it all begins with a problem identification and then moves towards the ideation stage.

Ideation and Product 

After finding the problems you need a way to solve it. This is when product development comes into picture. This stage is aimed to create multiple solutions to one problem. After finding a list of solutions, the next thing in line is trial and error. However between this stage there are multiple steps that need to be taken so that the startup is sustainable in nature. 

This involves going to the right consultant. A consultant plays a vital role in trial and error procedure as he knows exactly what the customer wants and what would be feasible in the market. The consultant offers his set of solutions as well. He is also the key to the next important thing in line which is finance. He knows people who are always willing to finance such startups. Thus a consultant is an important key in product development. The consultants take the necessary steps to get the startup its first round of funding. Hence the startup is flushed with enough capital to begin its trial and error procedure.

Product Development 

Product development takes a long time as in this stage the customer experience is to be noted and the product is tested on live audiences. For this round the final product is not made, rather a demo model is made which is always open for further modifications. After noting the customer experience and reviews, studying the market properly and knowing the finance required the startup incubates its final product. 

In this stage the most important thing is finding the correct team. It is very important to establish a team which is always ready to give in full efforts. Only good ideas are not the important aspect of a startup but a well established team along with perfect execution is the best mix for a startup. This not only involves the employees but also the developers and other aspects as well. The team needs to diversify itself into areas so that work is divided and the process gets boosted.

Creating a Channel of Distribution or Workflow

If the product is physical a chain of supply needs to be created so that the product can reach the end consumers. Also constant consumer feedback is required at every stage of this procedure as for a startup, there is always scope for modifications. 

If the product is service or software then the workflow needs to be simple so that the customers can easily access the same. Hence this way the product reaches the end consumer and hits the market.

This stage requires maximum financing from venture capitalist or funding companies as the initial months are going to be full of losses given the product expense and fixed and variable costs. This stage tests the startups feasibility and liquidity. Hence backing by multiple sources of finance is the prerequisite for any startup.

Post Product Launch

Post the product launch, the balance sheet of the company will take time to generate profits for the startup and every stakeholder. This stage later on extends to expansion and diversification of the product line or services. 

The important stage which kicks in later on is to give the investors their exit pass. This can be done either by paying them off from the profits earned, by giving them partnership or stake in the company, by taking the company public and diluting the holdings etc. 

For example the Paytm IPO is coming forward with one of its objectives to show the exit gate to investors through the public money. At this point the startup becomes a company.


90% of the startups tend to face failure due to multiple reasons. There could be higher competition, low customer base, improper product, cash crunch. Other reasons include improper team, affordability of product, poor marketing tactics, legal challenges, poor consultation or developer team etc. 

Hence the startups are bound to attract failure due to multiple reasons. The data also suggests that only 10% of startups succeed at the end. However in reality it’s all about hard work and passion. If the team is passionate enough they would find a way out to make the startup successful. 

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