As an entrepreneur, you’re constantly juggling. Balancing financials, marketing/sales, product development, operations, it’s no wonder that Jack Dorsey (founder of Twitter) sleeps only three hours a night says Paul Haarman. The stages of entrepreneurship are like climbing a pyramid–it starts slowly, but as you reach the top (your exit), there is nowhere to go but down (until you start another company).
1. Honeymoon Stage
This stage is characterized by optimism and over-confidence. You look at your competitors with disgust because “they don’t know anything.” Your product has yet to fail or even face any adversity so that this stage can last for years. It seems that everything keeps moving forward without any bumps in the road until one day, you realize that your product doesn’t work anymore. That is when you reach what I call “The Plateau of Product-Market Fit.”
2. The Plateau of Product-Market Fit
Looking back on the early days, this stage might seem like just another honeymoon stage, but it’s not. Instead of seeing only green lights this time, you start to see reds and yellows–signaling danger. However, since there are no imminent dangers, people think that quitting or even slowing down would be wrong, so they keep pushing forward with blinders on. Soon enough, though, your company runs out of money (but usually before then, something else bad happens). Before raising more money (or down), you must reassess your position and assumptions.
Paul Haarman says, most entrepreneurs don’t do this, of course; they raise more money (at a higher valuation) and pretend nothing ever happened. Then their company dies of malnutrition–starved of both time and money (because of mismanagement).
3. The “WTF” Phase
This usually occurs at the same time as the next stage, “the hangover.” It is that moment where you realize that your business is not going to succeed; it’s too late to turn around, though, so you sprint hard and fast for your exit (hoping to get bought out).
4. The Hangover Stage
You’re hungover because you probably spent all your cash on marketing/s efforts in an attempt to buy new customers says Paul Haarman. Sometimes, entrepreneurs do this to sell the company, but most of the time, they want to exit (sell the business). Once you run out of cash, getting that next round becomes impossible; your advice is no longer relevant (to your investors), and once again, you’re back at square one (or worse).
5. The Rebirth Stage
You learn from your mistakes and now look back with regret. You know what would’ve worked if only you had done things differently or better. This stage starts when you start investing in other start-ups (usually through coaching/consulting), using your experience as a source of wisdom rather than money/resources to help others succeed faster. If this works, then congratulations! You just found your second business.
6. The “I’m Rich Bitch” Stage
If not, you become bored and go on a rampage–spending money like it’s water (which for some entrepreneurs is true). You travel the world, buy fancy cars/houses and start to enjoy life since no financial concerns are holding you back anymore. When you meet with other successful entrepreneurs at cocktail parties, they’re surprised that you aren’t starting another company yet because, by this point, they expect that ANYONE who has been an entrepreneur will want to continue staying in the game, but only if the person becomes passionate about what they are doing again; otherwise, if someone appears content with their wealth, then people will assume that they are no longer passionate about entrepreneurship.
7. The Visionary Stage
This stage is where you start to see the world in a different way–one with unlimited possibilities for new companies so long as they can think outside of traditional paradigms and do what has never been done before. Creative thinking separates this stage from all other locations, so some entrepreneurs will never reach it (especially when they get stuck in earlier stages). This doesn’t mean that you cannot enjoy your wealth, travel, or fancy toys, but it means that you have something more prominent on your mind–something more important than anything else in the world! Finding out what that “something” is precisely is up to each entrepreneur individually; only they can discover their true calling and make a lasting impact on the world.