The 3 Eras of all Successful Start-ups

After countless interviews with candidates at The RealReal, I found out that the best way to describe the context in which they will evolve here is through the thorough explanation of the three eras of a start-up. I love the Rule of three. I learned it the hard way: Never start enumerating more than three things in a speech or a text, you will inevitably forget one… And if you don’t your audience will.

So there are 3 eras to a start-up :

Thee Eras of a Startup

In depth analysis of each eras will be posted in an upcoming trilogy. But I wanted to freeze some key concepts right now because I feel it’s always important to secure the context in which individuals are destined to evolve. It sets expectations right and spares everyone’s time because different eras call for different mindsets and mostly different types of collaborators. By mapping key requirements associated to each eras right up front, smart people are much more inclined to highlight what in their experience and personality makes them great candidates depending on the era the start-up is in.

Proof of Concept Era (POC): When I walked in at The RealReal, the POC era was already over, but you could easily experience remnants of the transition in the early employee’s habits and behaviors. Most start ups don’t make it through the first era. Sometimes they get Series A seed funding to get their concept going but it will most likely stop there. Proving your concept requires sometimes several iterations, series of beneficial incidents , and enough meaningful encounters. That’s why most start-ups run out of time, resources or simply interest. Some visions are also just emerging too early. later start ups will succeed with a similar concept because their timing will be better. POC era involves believers doing whatever is necessary to make the idea go forward. People often miss the constructive chaos atmosphere surrounding this era when the company gets funded for its success  and moves on to the “Brace for Impact” era.

Brace for Impact Era (BFI): Like I try to illustrate it by the way I name it, BFI is a transitional state. A dangerous and hazardous one.  Full of pitfalls and roadblocks. It’s time for a start-up to understand what its pillars are and own them all. The RealReal focused on making its business model work from an operational standpoint during the POC era and was wise enough to quickly outsource Technology for a time being. But When they got funded, they brought all of their critical assets in-house, owning their entire technology stack and building flexible and adapted software to automate and orchestrate their already stable operations. This is what BFI era is about: Securing a start-up’s own destiny by owning the whole value chain. Leveraging on the most recent technologies and services is the way to go fast with this. Resources are limited and choices need to be made when it comes to the areas to focus on. All verticals can’t grow at the same pace, all markets cannot be developed at the same rhythm, etc. Tough choices to be made and a company gets through this era when they manage a profitable outcome. The longer a company wanders in this transitional state, the harder and costly it is to move to the more mature, real growth-enabled era. Companies die failing to transition quickly enough. At this stage, the company gets bigger than its key individuals and can absorb change and shifts.

Growth Era : That’s it! They made it, that growth period lasts until we stop calling it a start-up. We deal with more streamlined processes, people walking in are no longer called visionaries. We measures business moves more carefully, we think about optimization because it enhances margins. We stop throwing bodies at problems and favor leveraging on technology to solve problems. We start talking about Enterprise Resource Planning (ERP), we start talking about Operational systems, we have exception handling covered. We care about protecting our positions and plan our next expansions more carefully. When this final transition happens, several collaborators move on to other career challenges because they are addicted to the adrenalin and prefer to move on to another idea so they deploy efforts to get there once again with another start-up. Trust me I know that feeling.

So now the debate is on. Prove me wrong, how is this representation not the case for every successful start-up?

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