Platt Perspective on Business and Technology

Building a startup for what you want it to become 16: moving past the initial startup phase 2

Posted in startups by Timothy Platt on June 26, 2016

This is my 16th installment to a series on building a business that can become an effective and even a leading participant in its industry and its business sector, and for its targeted marketplaces (see Startups and Early Stage Businesses and its continuation Page 2, postings 186 and loosely following for Parts 1-15.)

And to be more specific here, I offer this series installment as a direct continuation of both its Part 14 and Part 15.

• I concluded a more general, orienting line of discussion on products and product portfolios in newly forming businesses in Part 14, and at least briefly outlined some of the issues that arise in product portfolio development as they arise in the earliest new startup step of a business’ founding. And I said that I would follow that startup (pre-revenue) stage discussion in an upcoming installment, with a matching discussion as to how those same issues develop and play out in an early development stage (with revenue starting to come in, but where that is still at a pre-profitability level), and for an early growth stage business (when the business has just started to become consistently profitable.)
• And I continued that discussion in Part 15, where I more fully outlined what these first three critical steps in forming and building a business involve, and how a new business transitions from one of these steps to the next.

My goal for this installment, with those two lines of discussion in place is to explicitly delve into the issues of product and product portfolio development in early development and early growth stage businesses. And I begin that here with businesses that have just received their first payment for products sold or services rendered, and that have just formally left their initial startup phase. And I begin addressing all of this with the fundamentals, and by repeating a basic point of assumption that I am building this narrative from:

• I am assuming the founding of a business that seeks to be actively innovative – and not simply follow some well established pattern with standard and well established products and services in some under-served community for them.
• And I assume that this business is being founded with a goal of becoming a trend setter and a recognized source of ongoing innovative excellence. No one there would be satisfied with just coming out with an initial innovation, and then attempting to rest on their laurels for having done so, turning that into steady-selling but non-innovative products or services moving forward.

So as outlined in Part 14, you have a new business that has come out with a first to be developed and marketed, innovative new offering. And you have begun bringing it to market and you have in fact passed the benchmark challenge of making your first successful sales of this product or service. You have started bringing in your first revenue from that and have exited your initial new startup stage and have moved into the early development stage.

In an ideal world, and with optimal business development that is unhampered by delays and unexpected challenges, you would already be moving forward towards adding a second true innovation into your product development line, and with a goal of smoothly, efficiently bringing it into production for marketing and sales and before your first innovative offering looses it luster.

If your goal really is to always have at least one truly innovative offering in your product portfolio at any one time, you are already planning ahead for when your first such offering loses its innovative edge so you can refresh your marketable image as still being a source of the new and innovative. And at least ideally, you will start moving forward on this next newest and greatest as your revenue stream begins to develop and as your new business gains the fiscal wherewithal to be able to do that. Here, to be somewhat arbitrary, but to offer an in-principle working timeline, you might plan on ramping up and developing your production lines and your product capabilities with a goal of actually bringing that second source of innovation to market about the same time that you start to consistently bring in genuine profits, exiting the early development stage and entering your new business’ first early growth phase.

Yes, this is very ambitious, but if you do not set audacious goals you will never reach them. And in this, and taking that timeline as a stretch goal benchmark, you would ask yourself how you can come closest to reaching it while still maintaining sufficient fiscal and organizational prudence to be able to sustain your effort: not risking running out of funds from avoidable excessive risk in how you allocate and expend your funds available, and not expecting yourself or your by now growing staff to have to work 24 hours a day as a requirement for success.

I have been writing here about product and service innovation. I also write a great deal in this blog about business process innovation, and in fact about how that can be the most effective and long-lasting source of competitive advantage for any business that sees innovation per se as its best route to ongoing success.

• Product and service innovation: innovation in what a business brings to market is all about what that enterprise does, that defines it and the goals and objectives side to its underlying business model.
• Business process innovation is all about how a business enterprise accomplishes that, and more competitively successfully then other businesses in its industry or sector can.

And this brings me to business process innovation, and back to a detail that I only noted in passing, above. I wrote, in the context of setting an audacious timeline goal, of asking yourself “how you can come closest to reaching it while still maintaining sufficient fiscal and organizational prudence to be able to sustain your effort”.

• How can you more effectively organize and plan and operationalize your basic business processes, so as to reach this goal, or at least approach it as closely as possible?

This is where the issues of lean and agile enter this narrative, and eliminating process waste and inefficiencies. And along with developing and maintaining an effective organizational focus and a corresponding system of priorities, this means developing the communications and other capabilities that would be required to make all of that work. I am going to turn to that set of issues in my next series installment.

Meanwhile, you can find this and related material at my Startups and Early Stage Businesses directory and at its Page 2 continuation.

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