A Developmental Journey: From Idea to Startup
The lifecycle of a startup begins once a founder decides to start a business. From that starting point, there are 3 phases through which business ideas are shaped into startups:
Ideation is the process of generating ideas for a potential service or product suitable for a large-enough market. During the ideation phase, the initial business model idea is generated.
Being a primitive stage, the need for a committed skill-balanced team is still not required. Instead, only individuals are involved in this phase. These individuals figure out the full idea, research the market and finally, analyze the competitiveness of the idea.
All of this is done to insure the idea is not a repetition of prior work and adds value. By the end, the entrepreneur can receive support from Bootcamps and Hackathons. For instance, once the idea is finalized, the pre-product can then go to a Bootcamp, where the entrepreneur receives ideation sessions.
Ideation Bootcamps aim to refine ideas. Participants in the sessions brainstorm around local needs and possible market opportunities and develop possible business concepts.
Once the ideas are sorted out, next up is the concept development phase: Conceptualization. In this stage, a team of two to three main co-founders is formed with balanced ownership, as well as a larger team with lighter commitment.
The team chooses a clear market target, develops a business plan and decides on the business model. After targets are set, the team is required to set a minimum of 3 year milestones to reach the aims, as well as decide on equity and vesting provisions. Here, it is optional to already have an initial product or service developed.
During this phase, support is received from family and friends, as well as personal funds. The entrepreneur can also participate in idea-level competitions. An example of such competitions in MENA is ArabNet’s Ideathon.
When the business plan is finalized, the commitment phase is up. The Commitment phase requires the formation of a committed founding team with the proper skill balance. The team should be able to develop the Minimum Viable Product (MVP) without having to depend on external sources.
The development of MVP marks a very important stage in the startup’s lifecycle. The MVP allows the team to test the business idea, learn, and validate with the least amount of resources. The final product is then developed only after considering feedback from initial users of the MVP. The MVP is also used to market to angel investors early on.
During this phase, it’s crucial to define the roles of the founding team and the shareholding pattern for the first 2-3 years of business.
After all this is completed, there are two options: Either the team rents a co-working space on its own and seeks out guidance, or applies to an accelerator or incubator.Incubators can help with generating and validating an idea. They can also invest or help find investors and provide contact. In addition, incubators provide mentors and advisors for guidance as well as training or education. They also help in product development and testing.