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The 4 crucial startup stages


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According to Investopedia, “A startup is a young company founded by one or more entrepreneurs to develop a unique product or service and bring it to market. By its nature, the typical startup tends to be a shoestring operation, with initial funding from the founders or their friends and families.”

Starting a new business with a new idea is a difficult process. Not only do you have to consider if your product or service has strong market acceptance and demand; but it also helps to consider the route from conception to market. You need to think about the structure of your company, the staff you will need, and the tools you will need. 

Thinking about aspects such as a great team collaboration system early on allows you efficient communication with all parties. Such communication makes all other aspects of getting your startup off the ground much simpler.  

This preparation alone does not guarantee success, but our guide to the stages of a startup should at least give you an idea of what lies ahead.  Many early stage startups fail, so preparation can be your greatest ally. 

It’s helpful to get an overview of startup development, but also to consider those tools that will help you communicate with co-founders, consultants, and others through the stages of that development. RingCentral has worked with thousands of startups over the years and offers all the tools you need to advance through the four crucial startup stages. 

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Stage 1: Ideas

Many of us will have had a “light bulb” moment; that business idea we are sure could make us rich if we could just get the idea to market. But doing so is an entrepreneurship journey that takes time and patience. 

Perhaps just as important as those two qualities, too, is foresight. If you focus on how to foster great collaboration in your business at this earliest stage, it will make everything that’s to come far easier. A great way to do that is to adopt a top-class unified communications platform

Think about it; even at this earliest stage of your startup, you’ll need to communicate and collaborate. With business partners, with trusted advisors, and with those who will come to form your team. 

If you don’t set up a unified platform for such communications, they’re going to happen piecemeal using a range of different apps and software solutions. Fast forward a few months to when you need collaboration to be fully on-point, and it’ll be so much harder to achieve. Focus on collaboration from day one, and you can drive innovation throughout the process of getting your business off the ground. 

The benefit of such foresight in focussing on collaboration and communication as early as possible is shown clearly by the story of Theta Lake. Theta Lake are a pioneer in the RegTech field and started working with RingCentral early in their startup journey. That ensured they had the tools in place to scale efficiently and smoothly when the time came. It also helped the company retain talented staff in a highly competitive industry:

“We’re hiring a lot of gifted employees, and it’s difficult to retain that level of talent if your people feel like they’re out there on their own. Even though we’re separated by geography, RingCentral is helping us to build a close-knit and highly effective team—all working toward a common purpose.” – Anthony Cresci, VP of Business Development and Operations, Theta Lake

What are the 4 key components of a successful startup?

Learn to bake success into the DNA of your startup

Happy launching!

A beginning 

Every startup begins with an idea. It’s the next parts of your first stage that are of more importance. Your initial work before you consider any other factors will involve research. Ask yourself some questions before you start searching the internet and the relevant markets. 

  • Does my idea exist in any sort of form already?
  • How does my idea differ from what is available on the market today?
  • What benefits or advantages would my idea offer to customers?
  • Do people want this product or service? 
  • What is my primary customer base? 
  • What is the product/market fit? 
  • What is the potential market share? 
  • What is my product’s ecosystem? 
  • Does my idea help to solve a tangible problem or issue people face? 
  • If my idea is something new, is it something people would want? 

These questions will mark the starting point on your startup journey. There are several steps ahead, from deciding what sort of communications setup will suit your company best—which, as we’ve said, you can never do too early—to chasing funding.


Research and development

1. Research 

Once you are sure that your idea has potential, then it is time to do further research and product development. You may consider hiring a consultant who will have the experience and market know-how to carry out market research. 

What variations of your idea are already on offer? What sort of pricing? Do existing products have issues that you can overcome with yours? Is the market saturated? Identifying where your product will sit on the market and how it may perform are two major steps towards your startup becoming reality. Also, consider what metrics you wish to use to measure success. 

The second part of your research is to seek the views of actual customers. Good market research will be integral to your business plan and to seeking funding. And you don’t have to break the bank to sample a good percentage of your target demographics. Social media is a great way to gauge interest and needs, or you can use one of the widely available market research services on the net. 

2. Development

An idea that exists only on paper will have less chance of attracting the funding you need unless it is very good. So normally, the next stage is product development and developing that idea into something tangible you can present to potential investors. This is known as an MVP (minimum viable product). Eric Ries, who came up with the concept of an MVP, described it as:

“The version of a new product that allows a team to collect the maximum amount of validated learning about customers with the least amount of effort.” 

Having an MVP not only gives you something to show to investors, it also gives you an early-stage product that you can spot faults with or even offer to beta users for feedback. 

At this point, you may be working on your idea in your spare time because of budgetary restraints. That makes effective communication with those you’re working with—often at a distance—vital.

This is where the video conferencing, team messaging, and other features offered by RingCentral come into their own. They make it easy for you to arrange work with designers or prototypers, and even display your MVP’s capabilities via video.  

Stage 2: Seed 

In some cases, entrepreneurs will self-fund (bootstrap) their startup alone or with co-founders.  This may come from savings, remortgaging property, or personal loans from banks or friends and family. In most cases, though, people look to different sources to fund their startups at this stage.  

Sometimes, a single seed round of funding for their product is all that is needed. For bigger, more complicated products or services, you may see several rounds of funding including a series A round, as well as series B and even series C. 

1. Crowdfunding

Seeking funds this way is becoming an increasingly popular choice for many startups. Not only does it offer a good funding source, but your campaign also works as a marketing strategy by creating interest. Many people incentivize their campaign with various reward levels such as free products, etc. This kind of funding, as well as seeking finance from friends or family, is often grouped together under the name ‘pre-incubator’ funding.  

2. Incubators and accelerators

Most major US cities will have some form of incubator or accelerator programs. These tend to operate over shorter terms (up to 12 months). They also help you to network with other startups, sector-relevant mentors, and possible future investors. 

3. Angel investors

Angel investors are people with surplus funds who look to invest in new startups. They may be individuals or, increasingly, a group of individuals that considers a project and one or more will come on board. An angel investor will expect a percentage of your equity in return for their investment.

4. Bank loans

Banks remain a traditional source of funding for many startups. A bank will need to see a robust business plan to consider giving a loan. Bank loans will either provide you with a working capital loan to build and establish your business or a funding loan for a more prolonged lifecycle.

5. Government schemes and grants

What is on offer in this area may depend on what your product is and also where you are. There may be grants available at federal, state, and even city level, but it is a route that is very much worth investigating. Grants may also offer access to mentors and other networks.

6. Venture capital firms

Venture capitalists are usually professionally managed private equity firms who look for good series A investment opportunities. These arrangements are usually on a shorter-term basis (usually up to five years).

Tips for the seed stage

Whichever of the above routes you choose to take, the key is conveying the potential of your product. You must convince potential investors—of whatever stripe—that you’re worth their money and time. 

In this day and age, you’re likely to have to do your convincing virtually, at distance. That makes a top-notch video conferencing solution like that provided by RingCentral essential. Having a reliable video meeting tool with screen share, follow-up capabilities, and more, lets you deliver presentations that will knock investors’ socks off.     

Stage 3: Early stages 

You have secured funding, you have researched the market, and you have a viable product. The next, and often scary step, is launching it to market and securing those first customers to achieve initial growth. Ideally, you have prepared for this stage thoroughly.

At this stage, it’s even more essential to have a solid infrastructure to support you. That may mean cloud-based communications, video conferencing, team messaging, and more. Doing business is not only about selling to customers, it’s about communicating with them as well. 

Tips for navigating the early stage of development

Stages of development will look different depending on your sector and product. Not to mention what you anticipate your market share as being and how you view your long-term plans and scalability potential. One startup may aim for a first year revenue of $30 million, while another may only aim for $10 million. 

Any goals you should set must be realistic ones. They should be determined by much of what happened in the first two stages. Aiming for a new market before you have succeeded in your existing one could be too quick a move. 

Once your product is launched and you have, hopefully, seen encouraging early sales and customer retention, your next action should be evaluation. This is not only about evaluating the product itself, though those early reviews and recommendations are crucial. 

This is also about evaluating employee experience and how the infrastructure you have put in place is working to drive collaboration and, thus, innovation. Ask yourself: are the communication channels you have in place providing the very best environment for your team to excel?

If the answer’s no, do something about it. If you didn’t adopt a RingCentral solution at the outset—why not?!–then now’s the time. RingCentral gives startups the framework for success, by getting communication and collaboration nailed, and giving you the freedom to do your best work.

Getting your team on the same page and keeping them there helps drive productivity and innovation. When it’s easy to share ideas and work together from anywhere, you’ll find unique answers to all the challenges growing a startup presents. 

What’s more, down the road, when customer experience becomes your primary motivation, it’s proven that already encouraging great employee experience will make life easier. 


Stage 4: Growth and maturity

Survival and initial growth 

You have survived your first year—or first few years—and have an expanding customer base as well as a healthy revenue stream. Once you have that solid foundation, it is time to consider growth and scalability. 

This is also a time when you may look at adding to your workforce, particularly in the areas of management. At this stage, you are looking to grow, to attract new customers, and perhaps to introduce new products or services. There are multiple things demanding attention:

  • Ensuring steady revenue
  • Reaching new customers
  • Customer service development 
  • Evolving product or introducing new ones
  • Marketing
  • Administration 

If you started small, you may not have all the required staff to cover these demands. As you grow your team, though, ensure that you keep everyone both connected and engaged. They need to display the same passion and enthusiasm to your customers as you yourself would. 

Effective communication and collaboration is key to building a close-knit, and therefore productive, team. An all-in-one communications solution like RingCentral can foster the kind of engagement that inevitably results in happier customers


If you have done well and your company has enjoyed rapid and healthy growth, you will reach “maturity.” It is at this point, often 10 years or more down the line, where your growth rate may slow significantly or even stagnate. 

The maturity stage can take several different forms and may also be the stage at which you have to make very important decisions regarding the future of you and your company:

  • Expansion. If growth rates have slowed, it may be time to look at ways of changing that. This could include expanding globally and setting up new centers elsewhere.
  • Acquisitions. You may decide to expand your company by acquiring other companies as part of that plan. 
  • Going public. Your expansion plans may require significant funding to achieve. If your business and finances offer opportunity, you may consider going public and offering an IPO (initial public offering) to raise the funds you need.
  • Exit. It may be the case that the business has outgrown you—or you have outgrown your business—and you want to seek new opportunities. Many startup founders grow their company to a certain size then seek to sell it so they can start anew.


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If your maturity stage does include any expansion, maintaining effective communication is once again essential. A larger, wider distributed team must still work together as well as your once small, closely connected employees. 

A communications solution that can scale with your company, then, is ideal. That’s precisely what you get with RingCentral. We’ve worked with a wide range of startups and grown with them when they’ve reached the latter stages of their development.  

Navigating the crucial startup stages

While many of us dream about becoming millionaire entrepreneurs, for most of us, it will remain a dream. It is estimated that 80% of new products fail every year. And of the 20% of successful products, the majority of them will have been developed by large and established organizations. That leaves a very small window of opportunity for the rest of us. 

A great idea alone does not make a great company, without additional considerations. Hiring the right staff at every stage is always going to be important. But, when it comes to considering scalability and the ability to have efficient communications, choosing the right systems will always be crucial to success. RingCentral has a proven track record in this area. 

If you’re confident you do have the next great idea (and product), using the small business communications solutions we offer can help you turn it into business success. Take one step at a time, do as much research as possible, and then leverage great communication to get the financing you need, build customer relationships, and scale. 

Originally published Mar 30, 2021, updated Dec 30, 2022

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