The 3 Stages of Startup Growth: Stage 3 — OperationalizeDec 17, 2022
If you’ve made it here, you’ve probably read my introduction to the 3 stages of startup growth. Maybe you’ve even dug into the details on stages 1 and 2. You’re here because you’re ready to identify and tackle the challenges that are facing your startup. You’ve seen some pretty significant growth since you were in Stage 1, and you’re ready to take it even further. Good for you! This is an extremely exciting stage for your startup, and overcoming the main obstacles at this point can help set up your business for sustained, long-term Stage 3 startup growth.
Let’s look more closely at Stage 3 to help you align your actions and priorities.
Key characteristics of Stage 3 Startups
You might be feeling pretty confident in Stage 3, and with good reason. You’ve come a long way, and have seen some substantial success. Not sure if your startup is in Stage 3? Just want to understand in more depth what characteristics a Stage 3 startup? These startups typically find themselves aligned with some common traits.
In Stage 3, your startup…
> Your business has scaled — you’re adding new hires and customers at a strong rate
> You have successfully removed yourself (or are VERY close to it) from the day-to-day operations of your startup; you have a talented team you trust to handle it
> Your annual revenue is at or above $2 million
Stage 3 startup are probably feeling pretty confident, and you should be! You’ve seen some tremendous success. But it’s definitely not time to rest on your laurels. The decisions you make in this stage and the priorities you focus on will dramatically impact your continued growth.
Priority focus areas for Stage 3 Startup Growth
Stage 3 startup growth (and beyond) requires prioritizing these key areas:
> Documenting all remaining Go-to-Market workflows. You should have began this process in Stage 2, but now’s the time to continue documentation. This is essential for standardized, careful growth, and will help you gain efficiencies and customer alignment as you scale.
> Formalizing a Customer Insights program. Remember in Stage 1, where you focused on listening to your customers and prospects? It’s important not to neglect that step as you grow. Except, instead of informal conversations, now’s the time to formalize a program. Your customer should be at the center of every decision that is made for your startup. Measuring your net promoter score (NPS), implementing key programs and win/loss analysis are all important steps here. And of course, formalizing the process for digesting and ultimately taking action on these insights is imperative.
> Automating non-value-added processes. Productivity takes a massive hit when your team is spending time on non-essential tasks. Automating them will free your team to focus on mission-critical tasks instead. It’s important to be very intentional about this approach.
> Developing a formal learning and development program. Retention is a critical component of continued growth and success, especially in today’s tight talent market. Your people are your MOST critical asset — high turnover can be even more costly than customer churn. Formalizing an investment in your team through learning and development is an excellent way to decrease turnover and improve employee engagement. To that end, you may also want to consider investing in an employee engagement platform or program as well.
The key threshold for Stage 3 startups
When you’re at Stage 3, you’ve clearly grown accustomed to growth. You’ve moved beyond Stages 1 and 2, and are feeling confident. But, you may have experienced YOY growth in the previous year, only to see that your Stage 3 startup growth stagnated in the following year.
Worried about stagnating growth in Stage 3?
Whether you find your startup stalled out at Stage 3, or you’re trying to prevent growth stagnation altogether, I can help. Shoot me a message through my website and let’s connect.