Integrated Knowledge-Based Analyses of Socio-Economic Issues

Report Catalogue Data

  Report Class   General Public Report
  Analysis Type   The Entrepreneur
  Issue Category   New Venture Development
  Release Date   02_24_2008
  Last Update  
  Reference Code   GPR-TE.NVD.FBE-20080224-SVS

Founding the Business Entity
Stages of Venture Startup

An activity qualified as a ventures by the very nature of the qualification is attended with financial high risk. Hence, [business-]venture development planning in every respect involves taking the development of a venture through a high-risk evolution lifecycle but bringing the venture ultimately into a self-sustaining operating and profitable business entity. The evolution lifecycle of a business venture, however, are empirically determined from the Corporate Lifecycle Curve to be about six stages, three of which are development stages: Embryonic Stage, The Start-up Stage, Growth Stage. So the entrepreneur engaged in the development of a venture must be conversant with the dynamics, characteristics, and demarcations of these stages and to carefully plan for the effective and successful transversal of these stages by the venture. These plans, of course, are necessarily documented in the Growth Tactics Business Plan, as well as it attendant Business Plan Appendixes also and more correctly described as Growth Tactics Implementation Plan. Further, prior to entering into any of the venture development stages, the entrepreneur must have and if not should, first create the legal entity that undertakes the tasks of the venture development.

Embryonic Stage
 The initial stage, more accurately the inception state  of the development of a venture, focusing on the initiation of the venture is generally known as the [Venture] Embryonic Stage. This stage is characterized by the focus on the development of the Product Technology dimension of the vision innovation space.  However, the actual object of the focus depends on the development-state of the product on the Product Technology Dimension as noted in the vision analysis. Usually, the dimension development state may be one of two states: The technology has been validated experimentally, or the technology is simply conceptual. In the former state, the object of the focus is on the optimization of the technology dimension; and in the latter state, the object of the focus is on the experimental validation of the dimension to be followed by the optimization.

Effectively, for those ventures requiring the validation of of the product technology the venture development begins with the Research and Development for the vision product. Accordingly, the founding of the venture corporation will begin with the institution of the R&D division, for development of the product technology. The tasks of such a venture development plan therefore are very specifically targeted at the proof of concept, in which experiments are first set up for concepts tests, followed by the integration of the valid  concepts into a concept-product based on the architecture as defined by the innovation inherent in the vision as determined through the vision analysis. The concept-product again is subjected to a cycle of use-concept validation test and architecture redesign, until a design architecture is validated; or in the worst case the venture is

 abandoned constituting a case of the high risk. The product of result at the end of the concept validation is often called the base technology, as it often serves as a template from which many application-products are developed.

However, for those ventures for which the product technology has been validated, as is also the case just presented above, the venture development begins with the optimization of the product technology. This state of evolution of the venture addresses the specialization of the design of the concept-product for targeting a market segment and issues of the efficiency of the product technology as being use within the target market.. The primary tasks at this time is the tweaking, material selections, and the test-for and elimination of performance bottle-necks in the design such that the overall efficiency of the product becomes consistent with the objects of the Growth Strategic Thrust along the product Technology Dimension.

Ease of product production is usually the last of consideration of the stage, The Embryonic Stage. The optimized design or architecture of the product is now reviewed for manufacturability, or ease of production: Off the shelf materials, and existing products for possible use as components and adaptation of existing manufacturing systems are then explored for use. So again, the product design is tweaked and different readily available materials having comparable engineering material-properties to the ones used in the optimized design are sought and tested and selected and documented in the product design specifications. Of course, during this period of manufacturability design of the product, a small manufacturing process always get built that invariably becomes the start-up initial production plant and innovation template for the Manufacturing Technology Dimension.

The Start-Up Stage
Every Venture Startup Stage is in general characterized by three phases, although this is not obvious to most entrepreneurs. Each of these phases also is characterized with its peculiarities and pitfalls that must be adeptly circumvented or managed by the entrepreneur to successfully transverse this stage.  There can be no over emphasizing that the three phases: Starting Phase, Execution Phase and Penetration Phase;
need to be well-understood  and adeptly managed to successfully develop the venture.

By and large, a business is simply the profitably marketing of a product, and this phase of the Start-up Stage is concerned with creating of the capability of being in possession of the products to sell, creating of the business, and the establishing of the procedures or business practices/models on which to rest the operations of the business. Although this phase seems to entail the making of several decisions, the phase is, by and large, not difficult, but as with every building process, must be thorough managed to set a good foundation before moving forward.



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The Execution Phase of the Start-up Stage  generally focuses on the marketing of the company and products within the initial target market segment of the Embryonic Stage, creating repeat customers, and establishing the business critical mass necessary for the venture to thrive, and is effectively is the Market Entry Phase of the venture evolution. This Phase is the most critical phase of the venture  development stages, because this is the phase in which most ventures fail, and has, to that end, been given special presentation. This phase is the beginning of the onset of the implementation of the Growth Tactics Implementation Plan, hence the business is effectively put into a dynamic state: Relative to the Starting Phase when the venture, in essence, is in an inertial state, starting operations of the venture in this phase gets to put the venture into a dynamic state.

The Penetration Phase generally focuses on the marketing of the company and products to more customers within the market entry segments,  and the optimization and  implementation of the template manufacturing technology dimension as well as the expansion of production capacity for the newer products to meet the anticipated purchases of the prospective newer customers. The sale of the products to more customers of the initial market segment, otherwise the penetration into that initial market segment, gives this phase it name of Penetration Phase.  This phase usually ends with the horizontal growth of the product, as the product is repeatedly customized to meet the needs of different customers within the initial market segment of market entry.

The Growth Stage
The Growth Stage generally focuses on marketing of the company and products for  market entry into other target market-segments as identified in the Growth Tactics Business Plan, expansion of product line consistent with the set of products defined as first generation products of the venture, and production capacity increases for the newer products and variants of established products based the customization during the Execution Phase of the Start-up Stage.

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