Lifecycle Stages

Purpose

“I’ve noticed many times that leaders and entrepreneurs usually screw things up when they do the wrong things in the wrong stage of the Business Lifecycle. For example, startup founders often try to scale up their business without having validated most aspects of their business model. That’s as dangerous as a kid driving a car without having earned his driver’s license. Other entrepreneurs simply have not prepared for the next stage and then experience significant problems when the environment shoves them into it. That’s as naive as a young adult finishing her studies and then still not knowing how to earn her living. At the other end of the scale, it is common for leaders of established businesses to treat new business ideas as formal projects that are expected to forecast their sales, budgets, return on investment (ROI), and net present value (NPV). That’s like requiring children to calculate how they’re going to pay you back for their cost of living.

I believe that a lack of awareness of Business Lifecycle stages, and their context-dependent rules and practices, is the main reason for screw-ups in business. Being aware of where your business is on the typical path will help you anticipate the challenges that you will be facing soon. It will also help you manage your business model correctly according to the natural stage in its life cycle. For the best chance at shifting up to the highest level, kids and grownups need different freedoms and constraints at different levels in the game.

The business lifecycle stages play an important role in versatile organization design.”