HomeBlogStartup — stages of development (2022)

Startup — Stages of Development (2022)

6 Stages of Startup Development

Running a startup is a tough task! The startup development process covers the whole ecosystem — from the inception of the idea to the actual use of the final product including its improvement and development.

Each process needs detailed preparation before implementation. You need to dive deep in marketing, fund raising, team selection, understanding the basic MVP development principles, and so much more!

We have had a startup experience in our track record, so we know how challenging this road is. That’s why we want to share our expertise about phases of startup development and developing the product. Stay tuned!

Why planning a startup is important?

When launching a tech startup, it’s extremely important to understand the market, the needs of the audience, the killer features of the product, and the competitive environment. To cover all this information you need a plan. At different stages of startup a detailed business plan will help you to assess the viability of your product idea and achieve your ultimate goals. Here are 10 important tips for crafting your business plan prepared by Entrepreneur:

Main stages of startup development

Businesses often think that having a ground-breaking idea is enough to conquer the market. Actually, bright ideas are great, but only the tip of the iceberg. Conceiving and validating an idea, the process of software development, selecting the team are vital processes that need to be thought out. Before we move directly to product development, let's take a closer look at defining the core business outcomes.

1. How to conceive a business idea?

Idea validation is the process testing the business idea to understand how viable it is. At this startup company stage, it's important to evaluate a product idea, as it helps to understand the potential users and their key needs, the competitors, and the market conditions.

I asked our Head of Project Management Department, Yana Barsegyan, to share her insights on business idea validation and how it affects product development. Yana has been in charge of project management for about 3 years and has successfully delivered more than 20 projects. Here are her own experience and observations:

"It’s really important to study the market, explore the products that are already on the market. Why will your project be special, what new value can it bring to customers? What tasks and challenges will be carried out? Our team always discusses these points with our clients. Each team member is focused on the questions ‛What are the listed tasks? What kind of problem do we solve?' You may think that these questions are too broad and can be skipped but I don’t recommend you do that. I can say that based on the years of experience. Let me give you an example.

We had a project when the client had no clear ideas about what kind of main features of the product should be. Going to the market, he was frustrated about the huge variety of changes which needed to be done to meet the product customization. Every customer wanted to see their own features in the product. Because of the strict deadlines and many end-users, our client hadn’t validated the clients’ demands and got the market research done. As a result, we were customizing functions for every user's requests. It was time-consuming and expensive. This could have been avoided if there had been better idea identification, provided marketing research, and informed decisions. Such a preparatory startup development phase would have enabled the client to understand the unique features of the product, make quick customization, and propose users a unique selling functionality”.

To validate the product idea, it’s important to set up market research. Market research is the process of gathering information about what is happening in the market. It includes research on market dynamics to get to know your competitors, potential customers, and market conditions.

Your short plan to enter the market can be:

  • Define the geographical boundaries of your future market
  • Segment the market and analyze the data
  • Identify your target audience
  • Explore the market trends to better understand how competitive your product will be
  • Make a list of competing products in your future industry and define their key characteristics
  • Identify your main competitors in the industry

By answering these questions you can define the directions to develop your product, identify your market niche, and understand specific needs, thus getting a vision of your idea validation. The process of validation can be typically finalized by Proof-of-Concept or Minimal Viable Product building. We will cover them later and tell you what they mean and why they are necessary.

2. Hire a team

The main driver of your startup is your team. According to research, 14 % of startups fail due to not having the right team. In our recent article “Developing an MVP for SaaS Startups: Technical Insights”, we listed other reasons for startup failure. The article is highly recommended for reading and getting more insights about product development.

Before you start to build your team you need to answer the following question: should I hire in-house employees or outsource product development to a competent agency? Let’s find out.

In-house team

Hiring an in-house team offers maximum trust, a seamless team structure, and communication. The main benefit is to have all employees in one place working side-by-side to deliver what you hired them for. You do not need to give access to anyone outside your company, including access to your servers, applications, portals, and any other software you use.

But the cost of hiring a team is high. You will have regular payments on salary, training, vacations, employment taxes, and computer equipment for heavy-duty programming, development and designing tools, and many more. The scaling of the team will be slow and expensive.

Outsourcing team

You delegate all the processes to an outsourcing team which involves hiring remote experts through cooperation with a vendor. It works best for projects with an unclear scope of work and deadlines. A software outsourcing company can save your time on hiring the right qualified specialists. You are getting the right tech team — engineers, quality assurance engineers (QA), designers, business analysts (BA), and project managers. You save your time and get a highly professional team, flexible regulation of the team members, an agile system of people replacement.

Choosing an outsourcing team, you need to find a reliable tech vendor who will lead your project. You can read more info about how to find the right vendor in our recent article “10 Best Practices of Software Product Management for Small and Medium-sized Companies”.

3. Software development stage

The process of validation can be finalized by building a Proof-of-Concept (PоC) or Minimum Viable Product (MVP). Сreating a new product, you must understand that it needs to be approved by consumers and solve a number of their requests. Otherwise, you are going to fail your idea implementation. We are going to describe the difference between the PoC and MVP and benefits of each approach.


PoC is the implementation of a certain idea or functionality in order to verify its feasibility. PoC development allows identifying if it’s possible to implement the key complex features. During this stage, you acquire knowledge, test key hypotheses, and then start working on the actual project.

PoC is one of the options to validate a unique product or feature. Let’s go over the benefits of executing this approach:

  • It allows you to develop individual software features, test them and make sure you release the best version of your product.
  • It helps to determine whether your feature is feasible in a short period of time and move on to the product development level.
  • It saves your time and money, as development of PoC is faster and cheaper than changing product functionality during development process.
  • It shows you the potential risks and errors at the beginning of product development.

Minimum Viable Product

An MVP is a tested version of a product with a set of core features and scalable architecture. An MVP allows to proactively test the market, get real feedback from early adopters or get funded. It allows us to verify the product idea, analyze the demand for the product and prove business assumptions. Being the basic version, an MVP is one of the most effective ways to check the product’s fit.

The main benefits of an MVP:

  • It helps to minimize the cost of development, as you focus only on core features.
  • It requires less time and gives the chance to check product functionality on real users.
  • It gives insights on user behavior and market demand.
  • It helps to verify your ideas on future features and functionality.
  • It eases up the process of finding investors, as you have a real product to show, with proven demand, hands-on experience, and relevance to the market needs.

The crucial point about developing an MVP is acquisition of real users’ feedback. However, it’s important to know what metrics to consider. Here is the list of basic metrics to follow:

  • Bounce Rate — shows the percentages of single-page visits to your product.
  • Lifetime Value (LTV) — average revenue that a customer will generate throughout their lifespan as a customer. This 'worth' of a customer can help to determine the marketing budget, resources, profitability, and forecasting.
  • Net Promoter Score (NPS) — a tool that measures customer experience and predicts business growth. NPS is the key measure of your customers’ overall perception of your brand.
  • Churn Rate — sometimes called attrition rate and refers to a rate at which customers stop dealing with a company over a given period of time. The higher the churn rate is, the more clients stop buying your product.
  • Page Views — allows measuring the number of views you had for a particular page on your website.
  • The number of Users — allows you to analyze your traffic and optimize it.

With these metrics it’s possible to track all feedback, generalize, and convert ideas that you receive into concrete tasks for your development team. After positive feedback on your MVP version, you can provide your customers with additional components. We refer to this in the following section.

4. Startup process improvement

The next startup development stage is constant improvements and scaling. After releasing your product you might wish to let the process continue to run as it is. But actually, you need a plan again. After going through the first startup stage of development you need to regularly review your progress, check your market position and decide where to direct your efforts to strengthen your business position.

Feedbacks from customers help you to understand whether the product you developed serves the need you were determined to reach. At this stage, you need to think about removing unnecessary features without which the product will be better. A good starting point is to analyze your core activities, the products that you make, or the services that you provide. Analyze which features of your business are key, how you can use them to strengthen your position in the market compared to your competitors, what opportunities you have to finance.

Startup development programs

There are a series of different sources to help startups to gain their marketplace, improve the viability of the products and strengthen positions. Today I want to pay attention to such options as crowdfunding, venture capitals, angel investors, and accelerators. Let's look through them all.


It refers to the idea of raising funds for a project through a large group of people online. There are several channels like Kickstarter, or GoFundMe, where individuals or small businesses can provide early-stage support for startups. There are typically three types of crowdfunding: reward crowdfunding, debt crowdfunding, and equity crowdfunding.

  1. Reward crowdfunding is a way to raise your funds by reaching out to supporters, who receive a small gift or product sample if they pledge a certain amount.
  2. Debt crowdfunding allows receiving a loan and paying it off within a specific time frame. Some prefer this over a bank loan because it can be much faster.
  3. Equity crowdfunding gives a portion of the company ownership to the people who provide funding.

Venture capital

Venture capital is a type of private equity capital provided by outside investors to new businesses in order to ensure rapid growth. Venture capitalists (VCs) include a lot of expertise and have experience of how to overcome startup struggles.

You can meet potential VCs among the following communities Confluence, InnovatorsRoom, and TechAviv. These venues allow you to efficiently get in front of many pre-qualified investors and follow up with those who seem like the best fit.

Angel investors

An angel investor can be described as a high-net-worth individual who provides financial backing for small startups or entrepreneurs, typically in exchange for ownership equity in the company. If you are in the early startup stages, seeking funding from an angel investor can be a great way to obtain financing without taking on debt. Working with angel investors also gives you access to their knowledge and mentorship, which can be critical in the early years of business.


Startup accelerators, also known as seed accelerators, are fixed-term, cohort-based programs that include mentorship and educational components aimed to help startups to attain success. In the classical model, the entity prepares a startup for a big investor pitch deck event. The main goal of accelerators is to offer a suite of services to early-stage startups development including mentorship, education, office space, pre-seed capital, and get them ready for a demo day.

Choosing the right resource for raising your funds is an important point but the main thing is still to create something that others are ready to pay for. You are welcome to explore how we could get it all done.

How can DigitalSuits help?

Every step of the startup lifecycle, from the idea to validation of adding new features to a successful product, is important. There is no right way you should go. Just make sure you have enough expertise, passion, and resources to move forward. Use development startup services, hire a CTO, or consult with people who have come the same way earlier. We have our own experience in startup support and development. We know how to solve all issues related to product development and how to manage questions that arise most often:

  • You have a problem affecting implementation of your idea.
  • You have an idea to automate your process but you don’t know how.
  • You know generally what you want to build, but you have no idea what the individual components of the project will look like.
  • You’re trying to decide what software package to use and you don’t know which one is best.
  • You know what functions to do exactly, but you don’t know how to do it.

If you are ready to start your journey, we’re eager to help you. DigitalSuits engineering and project management teams have deep expertise in delivering tech products to various industries within tough deadlines and budgets. Contact us and we will leverage your product development and boost product launch.

Was this helpful?

No comments yet