The 5 Phases of Startup Growth (What To Do And When)

Growth is a fun topic. Especially when it comes to startup growth.


The sheer amount of creativity you have to conjure up and the break-neck speed you have to do it all with.

Thinking about the numbers going up quickly is enough to make many founders and marketers giddy. Experimentation, figuring out new markets, and moving the needle are definitely things that can bring a sense of fulfillment—but it’s not easy to get there.

While there are many things that are enjoyable, the process (like most) has some elements that aren’t as pleasurable as others.

There are about five phases or stages of growth that a company can go through.

It’s no one-size fits all, but chances are good that your company is about to enter or are in one of these stages (to one degree or another).

Being able to identify where you are in the process is the first step to ensuring that you complete that stage properly in order to move up the line and experience the greatest level of growth possible.

We hope to help you do just that. Let’s make it clear. We intend to do two things:

  1. Help you identify the major indicators of each stage to help you figure out where your current company stands.
  2. Give a loose guide to the things that need to happen in each stage in order to prepare for the next.

Let’s get into it.

Stage One: Find a Problem to Solve (and Potential Solutions)

Even if you have an EIN and a fancy name, you may not have any customers.

You may have just started. Maybe you’re involved in a think tank for the exact purpose of finding a problem to solve. Or you could have a founder that is burning inside you and you want to start yet another company.

Whatever the reason, if you don’t have a product (or have one that flopped)—you’re in stage one.

Key Thing to Accomplish: Find a problem and solve it (on paper/in theory)

Don’t start from an idea, start from a real world problem.

Too many people have an invention or software in their head and build it only to find out that there is no market, or it’s too small to be viable.

How do you do it?

Pick a few industries that are hungry for more help and get on the phone (and email).

Consider this the idea extraction phase. You pick a field that maybe you have interest and passion for and start talking to a group of people that could be your customers. Try to come up with open ended questions that get these people talking to you about—their industry specific problems.

Generic Example: You love animals (we said generic, ok). Where do people with sick animals go? The vet. Call a couple of dozen veterinarians under the banner of doing research for your company. Ask them questions and listen for common things that they are all dealing with.

What kind of questions? Let’s take a look at a few.

  • What things hinder you from helping more animals?
  • Are there any processes that you would do away with, if you could?
  • What services/software/products do you wish were available, but aren’t?
  • Which services/software/products do you currently use and could they be better?

But don’t just stop there. Ask follow up questions and have them elaborate on answers that weren’t clear.

Once you find a potential problem, try to pull a Dyson and create a better, or original solution to the problem.

After you have a potential market and product, it’s time to move to stage two.

Stage Two: Hone in on Your Product and Market

Now that you have something that would probably sell and customers that would probably buy it, it’s time to build it out (in your head) and test viability.

You’re not marketing yet. You’re putting in the legwork to ensure your solution is going to be profitable.

Key Things to Accomplish: Figure out your market size and desire while putting together the minimum viable product (MVP).

It’s time to do a little research using our previous example. Turns out that 3,000 new vets graduate every year and there is a shortage of good ones, especially in rural areas. According to the BLM, there are around 65,000 individuals with the job title of a veterinarian.

Those numbers aren’t bad and it could be worth pursuing. First, you have to check your competition.

In rare cases, you may have a product that hasn’t been created at all (like Slack). In more cases, you may have a unique spin on a current offer. In most cases, there is going to be competition doing pretty much the same thing.

All of those are ok, but you have to be careful in the “new product” category.

  • Check pricing and company size (of competitors).
  • Keep notes on what their product does well and doesn’t.
  • Pay attention to their value proposition (how they sell it).

After you have determined that this could be a product that will allow you to build a company (and the vet thing may not be), it’s time to build out your product.

  • DON’T put all kinds of features into it. Just do the core value very well. It’s a science to develop just enough of a product to sell, but not too much that wastes time.
  • DO keep talking to your core group of vets. They’ll be a huge part in helping you develop what the customer will need while avoiding features that won’t benefit them. This lowers your overall risk in the early stages of development.

Bonus Tip: Always get feedback throughout the process. Products, especially software, are never really perfect. The next update should always be to fix current bugs or add features that customers have stated are necessary/beneficial.

Toward the end of this stage, you should be selling that first product that fits the need without bells and whistles.

Stage Three: Set Company Up for Growth

It’s at this stage that you start assembling the team and ideas for your growth strategy. In other words, you’re almost at the point of excitement because things are going to (hopefully) take off.

This stage is also one of the most important to the process. Once you have a viable product with a market that has the room for growth, you have to lay the foundation for the growth phase.

Key Things to Accomplish:

  • Build a Growth Team: Putting together a team of qualified people to help with your growth will make or break progress. If you’re in software, it may be easier for you. Using a project manager, various other roles, and testing in iterations comes naturally.
  • Generate Ideas: Bring your team together and let the ideas/potential experiments fly. Write them all down, categorize them, and rate them in order of importance. Ensure that the ideas worth pursuing get assigned, dated, and followed up with.
  • Run Experiments: After rating and assigning everything start running your experiments in a thoughtful manner. Have daily and weekly meetings with appropriate team members to go over results and tweak experiments.
  • Documentation: The next stage is scaling the experiments that work at this stage. In order to do that, you need to document the things and workflow that works best on the small scale—so it can be expanded.

Bonus Resources: We’ve compiled a list of posts to help you with coming up with and deciding on experiments here and here.

After you have copy, ads, and other experiments that are working, it’s time to scale your efforts.

Stage Four: Grow Like the Wind (Scaling Growth)

You’ve gone through so much at this point, but you’re not tired. Why?

Because fruit is budding from the tree of progress and it’s time to cultivate it to grow faster. This stage looks similar than to the last stage. Very similar, just bigger.

It’s like having a toy Tonka truck versus a real Caterpillar dump truck. They look the same, but one moves a lot more dirt. It’s this scale that makes documenting the stage three progress so important.

Key Things to Accomplish:

  • Grow your growth team
  • Expand successful experiments
  • Run a larger number of experiments
  • Continue to adapt and document the process

Stage Five: Think About Long-Term Company Growth

Once you’ve got the product growing, the company needs to think about growth.

Your company created a product that solved a problem, but now it’s time to solve your company’s biggest problem—it needs to continue to grow.

After a certain point, those 3,000 new vets per year aren’t going to give you the results you need to beat last year’s numbers.

At stage five, you could easily find yourself going back to stage one for a different product. Veterinarians have more than one problem and may need another product from your now trusted brand.

If you are a SaaS product for vets, maybe the same software can adapt to human medicine?

Or, you could start another product in another market entirely (e.g. back to stage one). There are a lot of benefits to starting a different product under the banner of your company and then spinning it off onto it’s own label.

There are so many opportunities, but you can’t get to stage five until you’ve got a product and growth team in place.