Startup Launch, Scaling, and Exiting
Truthfully, founders of startups maintain a state of continuous launch for the first several iterations of their innovations, sometimes taking years. You should be enthusiastic to launch your innovation over and over as each iteration gets closer to your ideal offering. Though the process sounds daunting, there are several different methods for launch. Most entrepreneurs follow the steps like a path, but there is a lot of value in launching in multiple markets and communities at once.
Silent launching your website combined with a friends and family launch will help your business start to gain some data and analytics about your customers and may help you pivot between your next stages. Not every launch method is appropriate or attainable to every entrepreneur, so it is important to examine your target market, KPIs, and growth strategy to align your goals and launch methods before deciding which launch avenues to pursue.
Types of Launches
Silent Launch
Friends & Family Launch
Launch to Strangers
All you need is a domain name, company name, short description, contact, and call to action.
Do this as quickly as possible (as soon as you have your MVP). Use their feedback to evolve. Move out of this phase quickly, as they are likely not your exact target market and will not grow your business
Even before MVP, starting to build your company by offering your services, even if they’re not fully working yet, to strangers you see who would benefit from your solution
Online Community Launch
Launch to smaller communities with fewer but more focused networks of people.
Launch with Established Customers
Some university startups may have one or more established customers prior to the official company launch if they partnered with the research team during the research stages of the innovation commercialization process.
One of the most important aspects of creating a startup is ensuring its scalability. Figuring out the right time to scale is equally important so your team can adequately use their resources and avoid scaling up too quickly, which can lead to dissatisfied customers, supply chain strain, and a myriad of other obstacles. However, scaling has great benefits, including increased brand recognition, network effects, and economies of scale, all of which either decrease cost or increase reach.
Considering the scalability of your business model during the business planning and strategy-setting phase will make future scaling decisions easier and more predictable. As your company and its needs change, continue to evaluate your company's goals and how scalability aligns with them.
Testing Scalability: The RAWI Test
When you are ready to scale up, you should first perform the RAWI test, which is designed to demonstrate whether your startup is ready to scale. For more in-depth information about the RAWI test, you can read about it in Tom Eismann’s Why Startups Fail (p. 175).
Ready
Does your business model support rapid growth and prove viability?
Able
Are your staff and resources poised to handle the scale?
Willing
Are the founders eager to grow and accepting of the risk, and does scaling still fit the vision?
Impelled
Do rivals or outside forces distinctly and significantly threaten your startup?
Measuring Scalability: Six 'S' Framework
A way to measure your startup’s scalability is to utilize the Six S Framework.
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This framework is a tool to help you determine the most likely reasons your startup may fail during scaling or later stages. Closely examine all six aspects of the framework and evaluate your organization's performance within each.
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Learn more about the framework and how to apply it to your business by reading Tom Eismann's Why Startups Fail (p. 140) or visit the website to read an overview of the concept.
The three points within the triangle comprise the elements in the startup’s external relationships:
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Shared Values (Company Culture)
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Staff (Talent)
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Structure (Reporting Relationships & Management Systems)
The three points in the circle, when combined with the triangle, describe the startup’s product-market and capital market strategies.
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Speed (Pace of Expansion)
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Scope (Geographic reach, product line breadth, innovation, and vertical integration)
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Series X (Relationships with current and future investors)
Shared Values
Staff
Structure
Speed
Scope
Series X
Using the Six S Framework, your leadership team can predict potential issues and avoid them.
Exit Strategy/IPO
Exit strategies are contingency plans organizations execute to dispose of tangible assets or liquidate an asset upon meeting predetermined criteria. They can be executed to close a nonprofitable business, exit a nonperforming investment, handle catastrophic events, for legal reasons, or because an organization has reached a profit objective.
Whatever the reason for the exit, all entrepreneurs should include an exit strategy in their business planning to demonstrate their consideration of the business life cycle and plan for unexpected events.
Investors plan to recoup their investments via exit strategies. Typically, a VC hopes to sell its equity in a portfolio company within 3-7 years, ideally through an IPO (initial public offering).
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There are several types of exit strategies:
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IPO
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Acquisitions and Mergers
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Management Buyouts (MBOs)
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Liquidation
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Bankruptcy
Learn more about exit strategies at the following links:
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Your startup will want to pursue an IPO, MBO, or a merger/acquisition. Liquidation and bankruptcy are the options for insolvent organizations designed to help investors recover investments and regain the equity left in the company.
Thank you for visiting our Startup Guide!
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For more information about the potential pitfalls many startups encounter and tips and tricks to help make your startup successful, continue to the Pitfalls, Tips, & Tricks page.
Still have questions? Continue to our FAQ page to view some of NUtech's frequently asked questions. If you still have questions after visiting the page, you may submit them to jeakin@nutechventures.org.
For a list of all the resources linked and referenced in this guide, visit the Resources & References page. Here you can find our consolidated list of financial resources.