Redefining the Startup Lifecycle
January 1, 2022

Redefining the Startup Lifecycle

ISO 142 Million New Ventures

Do you have an idea for a startup? How about your spouse, neighbor, co-worker or friend? Odds are, the answer is “yes” because 60% of Americans have an idea for something that can become a new business. Now imagine what would happen if we all put on our entrepreneurial hats and turned those ideas into ventures. Together, we could create 142 million new companies and generate billions in economic impact and job creation!

Sadly, our research shows that most of those 142 million new businesses will never get started because 92% of people with an idea never do anything with it. 

The billion dollar question is: why? 

I spent several years researching why so few people give their ideas a shot. While there are a variety of forces holding people back, one of the most important ones relates to how we define and talk about the lifecycle of a startup. 

TLDR: we are setting an unnecessarily high bar for potential / rookie entrepreneurs. 

Let’s dig in. 

Visit any startup community today, and you’ll find no shortage of hubs, incubators, and accelerators. There, you’ll often hear founders being instructed to build a Minimum Viable Product (MVP) and get it into the market or participate in pitch events to win prizes and gain exposure. All good things. Except…

  • Building an MVP costs (on average) $30,000, yet the typical American has less than $5,000 in his or her savings account.
  • Pitching is a great way to share your new venture, but people fear public speaking more than death. 

To a lot of people, these feel like big and intimidating (and often expensive) steps. As do other things we encourage “idea stage founders” to do, such as incorporate, establish a mission and vision, and even raise capital. In fact, to many people with an idea they’ve been kicking around, these first steps are overwhelming enough to cause them to press pause on becoming an entrepreneur all together. 

It all seems too intimidating at the exact moment when people most lack certainty about whether or how to take action and confidence in their own capabilities to do it. 

Underpinning all of this well intentioned counsel from the ecosystem lies the assumption that people who show up with ideas are ready to build. We assume they’ve settled on their idea (however good or bad it might be) and we’re rolling up our sleeves trying to help them. In the process, we’re accidentally scaring a lot of people off. 

That’s because entrepreneurship doesn’t start with a startup, pitch deck or a business plan. It starts with a dream. And one of the most impactful things we could do to foster greater levels of entrepreneurship is to redefine the lifecycle to start there. 

The Entrepreneurial Journey Doesn’t Start With a Pitch Deck or a Plan. 

It Starts With a Dream.

At the dream phase, someone has ideas swirling around their head. But, they're on the sidelines. They aren’t yet taking action. There is no business being pursued at this point. Just talk of dreams and aspirations. Very often, at this stage, this person is working full-time (or they’re a student, parent, etc.). They typically are not yet involved in the startup ecosystem. 

At this stage, people tend to have a lot of fear. They often lack confidence, lack certainty about whether or how to take action, and they doubt their own capabilities. 

At this moment, the entrepreneurial ecosystem can help to give them confidence and provide a low-risk pathway to move from idle to activated through workshops, fun events and inspiring stories. 

Our goal is to get this person to move from the Dream Phase to a milestone called “Activation.”

At this milestone, the person is no longer idle. In some small way, they are activated in the startup community. Now is the critical moment to get them to take low-risk steps to explore their ideas that might hold the potential to become a new business (and doing so in ways that increase the odds of launching AND succeeding). 

And that's where the Exploration Phase comes in. Here, they can begin thinking about the ideas they have and honing in on one (or more) they are interested in potentially pursuing. 

In the Exploration Phase people should be running free and low-cost experiments to give their ideas a go, to learn, and to see if their key assumptions are validated. Not only is this a great way to test our ideas (not to mention learn a skill critical at all stages of the startup lifecycle), it also exposes people to the fundamentals of entrepreneurship and, if done correctly, can increase their readiness. Experimentation also provides real-world exposure to entrepreneurship, helping people gauge whether it is for them and gain confidence in their ability to do it. 

From this stage comes the go / no-go milestone: Intent to Pursue. This person has decided to pursue an idea, in earnest, with the intention of building a company / new venture. 

This person now is equipped with the core frameworks and skills to be successful and make good decisions as a founder. From here, they move into the Build Phase where they have a myriad of excellent models to follow to begin building in earnest. 

Putting it all together, a more effective and impactful startup lifecycle would look like this: An onramp that meets dreamers where they are and provides a low-risk, welcoming onramp that helps them build confidence, kick the tires of their ideas, and learn the skills they need to build with confidence. 

The startup lifecycle is a marathon filled with challenges, uncertainties, and unexpected detours. Just like any journey, proper preparation is key for navigating this lengthy road. Our reimagined approach to the startup lifecycle aims to empower ecosystem leaders and seasoned entrepreneurs to better understand and address the needs of those in the earliest stages of their journey. By lowering barriers and offering support, we strive to make entrepreneurship more accessible, encouraging more people to pursue their dreams.

Join us in spreading the word about this updated version of the Startup Lifecycle by downloading and sharing the graphic provided above. 

Let’s unite our efforts and collectively redefine what it means to get started.