THE STARTUP LIFECYCLE

THE STARTUP LIFECYCLE
A collection of expert tips, best practices and
insights for growing your company the right way

THE STARTUP LIFECYCLE
No two companies share the exact same path to growth and success. The plain fact is that various
factors influence how a business develops; these can include existing market conditions, industry
type, founding team (or lack thereof), so on and so forth. However, through the experiences of
our business development specialists at the Center for Entrepreneurial Innovation (CEI), we have
identified (4) common stages of development that a majority of startup companies experience:
1) Idea-Market Validation
2) Product Development
3) Commercialization
4) Scale and Growth
The “Startup Lifecycle” ebook offers some unique insights from leading experts and resources
in each of these areas to provide the latest trends, best practices and information in the four
stages. If you followed the blog series, you’ll notice most of the information is repeated in the
ensuing pages, but we did add a previously-unpublished resource guide of templates, checklists,
and more to jump start your business development.
We hope it serves you well in the growth of your company!
Greg Bullock
Marketing Specialist
Center for Entrepreneurial Innovation
bullock@ceigateway.com

OUR EXPERTS
We would like to acknowledge the efforts of the following individuals, whose expertise constitutes
the majority of the information contained in this e-book, originally presented during the “Startup
Lifecycle” workshop in June 2015. They are all champions of the greater Phoenix startup and
entrepreneurial community and devoted their time to providing valuable guidance.
HART SHAFER
CEO / Founder, Theraspecs
Lean Startup & Innovation Coach, Adobe
ERIC MILLER
Principal, Phoenix Analysis & Design
Technologies (PADT)
NATE CURRAN
Entrepreneur-in-Residence, Center
for Entrepreneurial Innovation (CEI)
RUSS YELTON
CEO, Pinnacle Transplant Technologies
Board Chair, Arizona BioIndustry Assocation (AZBio)

STAGE ONE
VALIDATION
Validation...You may hear various terms for this, but it really boils down to the question: should I invest any more of my time
or money into developing this business idea? Credit to Hart Shafer, innovation coach for Adobe and CEO/Founder of Theraspecs, for a
majority of the information included below (except where cited otherwise).
Why should you validate?
As Hart notes, running experiments leads to more validated learning over time, which basically means that the information you
gather is substantiated with quantifiable data. In terms of your business, this ongoing learning loop decreases risk and ensures
that you as an entrepreneur are investing your money in something that is more likely to yield a positive return.
Eric Ries’ lean startup process also explains that it is not just about “failing fast, failing cheap;” instead, entrepreneurs are
building a methodology that eliminates uncertainty through constant testing- an approach that will ultimately aid in the ongoing
development of their companies.
What should you validate?
In the simplest of terms, you need to validate ACTUAL customer behavior. This seems easy on the surface, but there are numerous
challenges to it. For instance, we all have cognitive biases that can become traps for our experiments because they frame our
questions, our tests, our assumptions, and can therefore yield less-than-ideal data. As a result, we must acknowledge where
these biases exist and adapt our experiments to reduce and eliminate them as much as possible.
Beyond that, there are specific areas of validation an entrepreneur can follow. The first is “problem-solution fit,” which determines
if there is a demonstrated need on behalf of a particular customer segment. Simply put, is there really a pain point?
Second, “product-market fit” is whether or not a specific, proposed solution would be adopted by your customer. It is important
to remember that you have NOT built a product yet, you are simply probing to learn whether or not your imagined solution – which
does x, y, z – will actually be purchased by your potential customer.

STAGE ONE
VALIDATION
(continued)
Last, “scale” validation evaluates whether or not you can actually engage your customers on a mass level. Kunal Punjabi also
defines this as validating the demand or market potential of your business idea (Validate or Die: Using Validation to Build the Right
Product). Is there enough interest or is this an omnipresent problem that facilitates the need for a viable business solution?
What validation tools and techniques are available?
There are numerous validation tools available. The overarching framework is, of course, the lean canvas business model. It
helps entrepreneurs conceptualize their customer segments and those corresponding problem(s) before then on to solution
development, engagement, etc.
One of the most common (and frequently overused) validation techniques is a survey. Hart explains that, while not a bad option,
they should be used more to supplement quantitative data by offering qualifying findings that offer a deeper understanding of
the business proposition.
Interviews are a great way to gain insight into your customers. Whether it is problem based or solution based, open-ended
questions that probe customer behavior will help you identify key patterns and findings.
Landing pages, A/B testing, and paper-sketched prototypes can gauge purchasing interest in your solution as well as the
effectiveness of specific messaging and feature sets. For additional tools, innovationgames.com has numerous options for
tackling business problems.

STAGE TWO
PRODUCT DEVELOPMENT
Whether you are building a software, hardware or even non-product solution, a key component of this stage is to apply lean
principles to the development of a minimum viable product or MVP. Eric Miller, Principal of Phoenix Analysis & Design Technologies
(PADT), shares his top-10 principles for lean product development.
1) Clearly define requirements and design to them
2) Requirements should be focused on customer value
3) Frontload the process with exploration and iterations
4) Create a level product development process
5) Balance expertise and cross-function integration
6) Design quality in to the product
7) Involve suppliers in the process
8) Develop expertise in your technical staff
9) Build in a culture of excellence and relentless pursuit of continuous improvement
10) Use standardization when possible, without blocking flexibility
Some additional tips from Eric:
- Avoid feature bloat Entrepreneurs often become concerned with loss avoidance – or the inability to penetrate certain
markets or reach certain customer segments if a product feature is not included. This is a dangerous misstep as it can incite the
addition of unnecessary features into a product, taking it further from the true requirements of the customer.

STAGE TWO
PRODUCT DEVELOPMENT
(continued)
- Accept that your MVP will not be perfect Identify the key requirements of your customers and include only those
features that solve for those needs. The purpose of an MVP is to save time and money while gaining valuable feedback, not to
have a flawless product on the first try.
- Design, document and improve upon the process Product development requires focus and structure. Document
each step of the process to not only incorporate it for future iterations but also to instill a culture of quality in the people who
implement it.

STAGE THREE
COMMERCIALIZATION
Now that you (in theory) have a validated problem and minimum viable product solution, the question becomes: How does my
business make money? Welcome to the third stage of the startup lifecycle: commercialization. This includes how to develop
an effective Go-to-Market strategy in order to become a viable, profitable, and sustainable business.
What is a Go-To-Market Strategy?
Nate Curran, Entrepreneur-in-Residence at the Center for Entrepreneurial Innovation (CEI), defines a Go-to-Market strategy as
the business model for your company. In effect, it is the pre-defined business processes a company deploys or plans to deploy in
order to bring its product and/or service to the marketplace and ultimately begin making sales and generating revenue. He also
notes that it is key to remember that commercialization is ongoing as market conditions change, product innovation happens, and
other situations arise which all demand an evolving action plan.
What should you include in your Go-to-Market strategy?
Murray McCaig of MaRS Discovery District, as part of an Entrepreneurship 101 lecture, cites four main questions that an effective
go-to-market strategy must answer:
1) What are you selling?
The real question is: What is your value proposition? This section of the strategy addresses those unique differentiators and
benefits that your offering gives to your target customers. It is your power statement. Ideally, you deduce the singular reason /
benefit for why a prospective consumer would choose you over your competitors.
2) To whom are you selling?
Who is/are your target customer(s)? These are the segments of the market that you have identified as being primary consumers
of your product or service, NOT the market size or share. Much of this information should have come from your initial market
research and testing in the idea/problem validation stage. Regardless, according to McCaig, you should first align customer
segments with your value proposition and then expand your market opportunity to address auxiliary segments that possess other
characteristics such as ease of selling.

STAGE THREE
COMMERCIALIZATION
3) How will you reach your target market?
This is an incredibly important component of your commercialization plan and is often the most misunderstood. Curran explains
that many entrepreneurs mistake this with their marketing strategy, when in fact it is your sales channel strategy. Distributing
your software app through an online e-commerce platform such as iTunes is an example of one distribution channel. Other
options include: direct personal selling, retail distribution, or indirect selling. McCaig acknowledges that you need to consider
various factors such as sales margin, brand credibility, and time to market when considering your channels.
4) How/where will you promote your product?
Now is the time to determine how you will ENGAGE your customers. There are inbound and outbound approaches to a marketing
plan; the inbound methodology relies on converting strangers into leads and nurturing them through the buyer’s journey until
you have closed the deal. It is more passive and typically less expensive but also requires significant work in the lead nurturing
process. Conversely, outbound takes a more direct and interruptive approach by pushing your marketing message through paid
advertisements, billboards, trade shows, direct mail, etc. It is traditionally more expensive. Both approaches have benefits and a
solid marketing plan will oftentimes deploy both to generate qualified leads.
Once you have identified the marketing outlets through which you plan to engage your target market, Curran delineates that
telling your story is the next step. Here is his shortcut for synthesizing the key messaging of your product or service:
Who: your target persona
What: the problem you are solving as it relates to your persona
Why: the benefits of your solution
How: the specific features that derive those benefits
When: call-to-action
Where: your engagement channel
An effective commercialization plan will adress these questions clearly and with purpose.
(continued)

STAGE FOUR
SCALE AND GROWTH
Your business is expanding, you are attracting and converting more customers and hiring employees to meet that growth. The
fact is: you are no longer a startup. Now the question becomes how do you manage that growth? In this last stage, we provide
perspectives of company scaling from “been there, done that” executives.
It Starts with a Culture Centered around People and Accountability
“It’s never to early to start thinking about your culture.” - Russ Yelton
Russ Yelton experienced first-hand the challenges of rapid growth when he assumed the CEO role of Arizona-based tissue bank
and medical device company Pinnacle Transplant Technologies. He quickly realized that the challenges didn’t stem from revenues
or customers, but rather with the overall culture of the company.
Consequently, Yelton pioneered new initiatives like company-wide retreats, the creation of internal communication outlets, and
the hiring of mid-level management to oversee the various departments. He recognized the value of every employee but still
acknowledged that a culture of accountability is the only way you are going to be able to manage the growth and development of
the company consistent with the high-level vision set by the leadership team.
Ari Weinzweig of Zingerman’s adds that building a successful organizational culture is a 5-step process: Teach it through
empathetic communication and storytelling; Define it with a strong corporate vision, mission and values; Live it with actions
that match your words; Measure it to understand what is working and what needs to be changed; and reward it often and
diversely to reinforce positive behaviors.
Understand your Smallest Customer
“It was not easy sending business down the road to a competitor, but we knew it was right for us.”
– Darren Wilson

STAGE FOUR
SCALE AND GROWTH
Bluemedia co-founder Darren Wilson knew that that the large-format print and signage company had reached a watershed
moment in its lifecycle when they had to better align their customer segments with their newfound growth. For Darren and the
Bluemedia leadership team, this meant giving up tangible revenue, from customers they may have even served previously, to
another vendor; however, the cost of doing business was more than the revenue they would have earned in those instances and
was therefore a necessary maneuver. This also emphasizes the importance of a strong company culture to be able to make those
hard decisions.
A recent article published online in the First Round Review reinforces this “subtract as you add” mentality during a startup’s
scaling phase because it can streamline processes and add new levels of efficiency. Too often entrepreneurs are focused on
adding – customers, employees, revenue, etc. – that they lose sight of the opportunities where they can cut out the excess.
Continue to Test, Measure and Learn
(continued)
“Never protect the past. If you never protect the past, you will be willing to never love [it] so much [that] you
wont let it go, either.” – Ginni Rometty
Ginni Rometty, Chairman, President and CEO of IBM, gives perhaps one of the best pieces of executive advice for a startup in the
growth phase. As she points out, you never want to fall too much in love with the way things were done or are currently done
because markets change, people change, times change. She adds: “Never define yourself as a product…if you live and define
yourself by your product or competition, you will lose sight of who your customer is.” Companies need to evolve and continue to
develop new solutions to meet the problems of their customers, who are evolving and changing themselves.
And with that you are right back to the validation stage of the startup cycle – testing new ideas with an evolving customer base,
but THIS TIME you are driven by a robust corporate culture and vision that is setting a path of quality and success.

ADDITIONAL RESOURCES
Validation
Lean Canvas Template:
http://www.uoguelph.ca/cbase/resource-library/wp-content/uploads/2014/05/Lean-
Business-Model-Canvas-template.pdf
Validation Tools and Tips:
http://www.mindtheproduct.com/2013/09/validate-or-die-using-validation-to-buildthe-right-product/
PRODUCT DEVELOPMENT
New Product Development Assessment Checklist:
http://www.acoa-apeca.gc.ca/eng/publications/FactSheetsAndBrochures/Documents/
New%20Product%20Checklist.pdf
Product Feature Comparison Templates:
https://www.edrawsoft.com/product-comparison-chart.php
COMMERCIALIZATION
Go-to-Market Strategy Overview:
http://www.slideshare.net/MaRSDD/speaker-slides-jan-30
New Product Launch Checklist:
http://www.brandprofility.com/wp-content/themes/brand/pdf/Product%20Launch%20
Checklist.pdf
Go-to-Market Strategy and Launch Planning Guide:
http://www.citrix.com/content/dam/citrix/en_us/partnercentral/other/go-to-marketand-launch-planning-guide.pptx
SCALE AND GROWTH
Growth Strategies Checklist:
http://www.roundroom.co/membership/opportunities_tool
7-Step Checklist to Growing your Business:
https://www.score.org/sites/default/files/Visa-SCORE-7-Steps-for-Growing-Your-
Business.pdf
5 Steps to Developing an Organizational Culture:
http://www.zingtrain.com/org-culture-steps

We Support Disruptive Entrepreneurs
The Center for Entrepreneurial Innovation (CEI) is a business incubator, located in Phoenix,
Arizona, dedicated to supporting technology-oriented companies through the four stages of
business development and growth: validation, product development, commercialization and
scale. CEI provides onsite business development and mentorship, discounted 3D printing and
design services, access to investment and other service partners, as well as office, wet lab and
light manufacturing facilities. Its clients, in turn, are committed to creating quality, high-wage
jobs for the Phoenix region. For more information, visit ceigateway.com.
Need help growing your tech startup?
Apply to join our incubation
program at ceigateway.com/apply