This content was created by Gregory Shepard. This content was uploaded by Gregory Shepard. This is a YouTube Minute Mentor video titled "What is the Lifecycle of a Startup? | 5 Phases of Startup Life | Gregory Shepard | Minute Mentor" (published 2022-06-27) featuring a monologue by Gregory Shepard. He explains the startup life cycle stages—vision, product, go-to-market, standardization, optimization, growth, and exit—links typical funding rounds (pre-seed, seed, A) to stages, and emphasizes the importance of standardization and optimization to reduce onboarding/headcount costs, improve margins and retention, and enable scalable growth. He gives concrete examples (e.g., 6–9 months to reach ~75% productivity, recruiter fees ~20%) and practical advice on documenting processes and training to avoid costly scaling pitfalls.
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So it's been a little bit since I've done a Minute Mentor, and you'll notice that my head is shaved. That's because my hair was falling out and I couldn't get— I couldn't get it to, to come to work. So this video is about the life cycle. So the important thing here is that when I went out with the team and we studied why entrepreneurs were failing. We were trying to understand why they were failing. In the process, we learned that when they were failing and how they were failing was more important than why. What I mean by that is there's a junction between the reasons why they're failing going down, which are big top reasons, and then underneath how they were failing, which are the details, and then the actual when, which is the life cycle, so that you could understand when they should be paying attention to the reasons why they fail and how those entrepreneurs failed. So this is about the life cycle. The life cycle has a series of different stages that go from vision to product to go-to-market, standardization, optimization, growth, and exit. And each one of these things have different reasons why they fail, different things you need to do, and different rounds of funding that happen typically during this process. So in pre-seed, you're looking at— this is covering sort of like your vision and your product stages in the lifecycle. And your seed round is covering your go-to-market and your standardization. And then you have optimization, growth, and exit, which is typically your A round with BOSS. So in the vision stage, you're trying to create your vision. You're trying to ideate exactly what it is you're building. We have courses for this to help you walk it through it. In product, you're trying to go through prototype, and then you're trying to build a minimal viable product and build your user advisory board, which will later turn into customers. Your go-to-market has your sort of pre-go-to-market, which is testing your theories out by converting your minimal viable product user advisory board, and then going to some warm prospects and seeing if the strategy that you have planned out in terms of the sales strategy is going to work out. And then you go into your full go-to-market, which includes your content, your demand generation, and all the other stuff that you have to do during that phase. Standardization is next. And the reason why standardization is there is because what I've noticed in the data is that you get to a point where people start to grow. And growth— it goes standardization, optimization, growth. And growth, the biggest expense is headcount. And the biggest expense in headcount is getting people onboarded and up to productivity. Without best practices, without a standardized process to do that, it costs a great deal of money because it takes typically between 6 and 9 months for somebody to get to 75% productivity. Now, in this strategy, you put together best practices, which is a makeup of who does what, when, and how do they do it. And it's written out not like an employee manual, nobody ever reads those, but like layman's terms and plain speak. I do this, and then I do this, and then I go here and do this, and so on and so forth. That standardization makes it so that you can have a boot camp or an initial training when you onboard somebody, teaching them how your company functions. After that, they go into their functional area, they shadow with somebody for about a week, and then they become product— they get to productivity much, much faster, which costs you a lot less money. And at the same time, everybody's doing everything the same way, which means that when you're looking at your KPIs, your leading and lagging KPIs, the data is all the same. People are doing things differently, the data is going to come in, it's going to be completely wrong. Optimization then uses— it steps on the shoulders of standardization to figure out how to optimize processes. Both of these things are very margin-friendly activities. So these things are going to help, you know, you have growth, margin, and retention. These things are going to help out with margin and drastically also in retention. So those 2 stages are tied together in a sequence of standardization and then into optimization. It's important to note that typically 33% to 40% of the initial cost of a startup going into growth is headcount made up of The onboarding, the cost of getting new employees. So if you think about it this way, recruiter fees are now 20%. You hire somebody for $100 grand, that's $20,000 in fees, plus you're paying these people $9 grand a month, $10 grand a month, whatever you're paying them. Now you have that extra money building up over time without productivity. And in fact, it actually costs your current people money and time because they're having to train these people. So now you add that on. So you have 6 months of compensation going out to somebody before they're productive. If you're paying them 10 grand a month, that's $60,000 in costs plus the cost of the recruiter. Now, if you can get that down to 30 days, it makes it a lot less expensive to grow because you may be hiring 5, 10 people at a time, which I've done from time to time. So this process of standardization and optimization are really, really important to avoid these different valleys of death that you have as you're going through and building a new business. And then you're ready for growth. Now, if you put growth in front of standardization and optimization, all you're doing is going to be not only growing your revenue, but growing all the problems and all the costs along with it. And that's not scalable growth. Scalable growth is where your income is going up and you're getting economies of scale, and then your cost starts to peel away, and the middle is that margin that you get, which should grow over time to a certain extent. And then you're also ready to go to exit because the person who's buying you is buying you on growth, margin, retention. You've tackled those issues. You documented how your business runs, which they will need to— so they will need to know. I mean, many times I've used the analogy of people saying, hey, look, if you're trying to put together IKEA furniture without instructions, good luck. This is a lot harder because this is a business. So again, vision, product, go-to-market, standardization, optimization, growth, and exit. I hope this is helpful.
