The early stages of your product journey are some of the most vital—and the most tricky. It can be difficult to navigate a new startup, especially if you're new to product management, and easy to make mistakes. That's why we've put together this guide to help you maximize early-stage growth for your product.

What are the stages of a startup?

First, let's go over the five key stages of a startup.

Pre-seed stage

The first stage of a startup is the pre-seed stage—also known as the idea stage. This is where you'll develop your idea, and do all of the research and analysis necessary to figure out if that idea is viable. Successful startups fill a niche or gap in your industry and solve a problem for your customers, and you'll need to figure out exactly what these are for your product. And that requires research into your industry, competitors, and potential customers.

One of the best ways to figure out if you have a viable product idea and product-market fit is to listen to potential customers. What are they looking for? What do they like about existing products? What do they dislike? All of these questions will help you figure out what your product needs to do.

Seed stage

The seed stage is where you focus on validating your business model. This includes determining your methodology, developing prototypes and roadmaps, and testing your product through different iterations.

It's important to note that when you're testing your product, you don't need to create a fully functional or viable product (often known as the Minimum Viable Product, or MVP). The testing stage requires you to go through several different iterations, and fully fleshing out each one wastes time.

Instead, focus on developing a core set of hypotheses and initial assumptions to test each iteration against, so you can get as much information as possible. This can also let you know if you need to change your hypothesis and pivot your assumptions in a different direction, or approach the problem you want to address in a different way.

The seed stage is also where you need to begin to think about financing and raising funds. For many, this simply means bootstrap financing—that is, self-financing—or loans or investments from family and friends. But there are many other forms of funding you may be able to get to start your startup, from crowdsourcing to business investors. Networking is very important at this stage, as it can help you find investors and connections that can help further your business.

Early stage

This is the stage we're going to be focusing most on.

The early stage is where your idea starts to evolve into a product. You'll still need to do some testing, but this time you're going to be testing iterations to see if any of them qualify as an MVP.

MVPs are released as the first version of your product; they're often less complex, and don't have full functionality. Its release into the market will tell you if you're on the right track, and what else needs to be done to better satisfy your customers. Essentially, you're trying to test the waters and figure out how best to expand your audience.

At this stage, most startups will already have a basic team that covers all required areas—including development, product, and support. This is also where you need to define your business model, as you'll have more opportunities for funding at this stage. Many investors—communities and venture capitalists alike—feel more comfortable giving money to products that already have something to show, so you'll want to put your best foot forward and have all the details they might need ready. This includes finalizing your business plan and developing a roadmap.

At this stage, you might already be earning some revenue in your initial growth, but your product will likely not be profitable yet as it is still gaining traction.

Growth stage

The next stage is the growth stage, which requires strong market demand to be met. That means upward trends in terms of new and recurring customers and billing and, most of all, profitability. The growth stage is where you should be starting to see a profit and growing your team.

The growth stage has the highest failure rate, and it's where many startups falter. You may have to adjust your approach to better suit your audience, or target new problems or gaps in the industry.

Funding at this stage is crucial. This is where you're most likely to get investments from venture capitalists and corporate shareholders, as you now have proven successes to show them. Private equity institutions may also come into play at this stage, as your company is now turning profits and stakes and shares in your company are on the rise.

The most important factor in the growth stage is recurring revenue and scalability. Your business needs to be growing in terms of profits and in terms of size and customer base.

Expansion stage

The second to last stage of your startup's growth is the expansion phase. This is when your startup is classified as a scaleup by demonstrating that it has a proven business model that will lead to longer-term growth and goal achievement. 

According to the Scaleup Institute of the UK and OCDE, a company must have grown at an annual rate of over 20% (either in terms of employees or turnover) for the last three years to be considered a scaleup. Does this describe your product?

At this stage, your company should have already experienced significant growth and expansion. While it may sound counter-intuitive, this is where you will need to begin consolidating your growth, both in terms of revenue and company size. Though your company will still be expanding and growing, you'll need to make sure you have a solid foundation to work off of once your growth begins to stabilize.

During the expansion stage, it's critical to continue looking at and seeking new markets. Though you want to make sure you have a solid footing in the industry you've chosen, you want to continue seeking new areas of business, too. As the industry and world around you change, your product will need to change and adapt too.

Many companies find it necessary to reach agreements with larger companies during this stage to get financing and infrastructure support. This is where you'll get the largest amount of Series A (first round) funding, and need to show off your performance at its max potential.

Finally, the expansion stage is where you must continue to grow your team and hire the best talent. Perhaps you want to hire more product managers, or dedicated CEOs or CFOs. Regardless, good people are one of the best ways to keep growing your company.

Exit stage

This last and final stage isn't one that all startups will undertake. Many companies' goals are to become high-value and long-term, but many also choose to sell their startup and exit. It all depends on what you choose to do and how involved you want to be in your creation. 

Often, this exit comes through one of three ways: by selling the founders' shares to another company, by acquisition by another company, or through an IPO (Initial Public Offering), which enters the company into sale publicly.

Tips for early-stage startup growth

Here are some of our best tips to help you grow your product from the start.

Listen to your customers

This seems a little obvious, but hear us out. A lot of companies can spend a bunch of money on market research, user-testing, and competitor analysis. And while all of these things can be important on their own, one of the best resources you have are your own customers. 

Customers that like your product and enjoy it will generally be willing to tell you what they like about it. And the opposite might be even more true: negative feedback, when not a one-off, can be a great way to figure out what you should change about your product. In fact, this negative feedback can often be some of the best ways to improve your product.

One of the easiest ways to collect and analyze user feedback is with UserVitals, our all-in-one feedback management platform. We help you bring in feedback from all around the internet; this includes other platforms like Intercom, Gmail and Slack as well as social media and a dedicated feedback portal.

Each piece of feedback is collected in our system as individual Insights. You can then organize these Insights into collections called Stories, based on type, source, or whatever else you want. This helps you see and analyze your feedback on a larger scale, so you can pick out common pain points and over-arching issues that can help guide your product and form your product roadmap.

While this freely-collected feedback is crucial, we also recommend sending out paid surveys or in-depth interviews as well to supplement it. You can even pull out people to target from the shorter feedback you've already collected.

Get a good advisor

Getting an advisor is one of the best ways to start your business off on the right foot. Often, advisors will have the experience and skills you may not yet have, and can help guide you through the complex process of growing your startup. They may also have connections that can be vital for networking, finding investors, and growing your team.

Pick a marketing lane to focus on

When you're first starting out, it can be easy to spread yourself too thin while marketing your product. There are many different marketing channels to choose from, from content marketing to SEO keyword-targeting to guerilla marketing to classic advertising. The truth is, not all of these tactics will work for you and your business. And while some trial and error can be helpful in trying to figure out what forms of marketing work best, continuing to work on all channels is unsustainable.

Pay attention to what gets you the most eyeballs, signups and revenue. Often, the type of marketing you choose will also depend on your product's industry or niche; for instance, content-based products may do better with content marketing via blogs or newsletters, whereas physical products may do better with classical advertising or sponsorships. Your advisor can help you here as they may have more experience with similar products.

All of this will help you put together what's called a user acquisition playbook: a guide on how best to bring in new users for the least amount of work. But creating this playbook isn't a done deal—you'll have to keep refining it as your product and industry change. Pay attention to the numbers, especially cost per lead and time spent on page, to see how each tactic works for you.

Have patience

Startups are hard work, and you'll often run into a lot of failures before you reach success. And when you keep running into roadblocks, it can be hard to keep going. But you have to fight the urge to give up and keep going.

Sometimes, you do need to start over from scratch, and you need to be willing to do so. But you should only do so when you have the data to back that decision up. Otherwise, just stay the course.

Don’t take things personally

Startups require patience, but they also require thick skin. It's not easy to keep going when you keep hitting setbacks and other problems. And it can take a toll on you and your team.

You need to be able to separate your startup's performance from yourself and your own abilities. Being too harsh on yourself can affect your mental health negatively, and lead to problems for both you and your team.