Stages of a Startup’s Lifecycle

Six months ago I purchased the book Corporate Lifecycles: How and why corporation grow and die and what to do about it by Ichak Adizes and I’ve been slowly making my way through it. The book reads like a college textbook, so plan accordingly, but the author does hit on key insights that I’ve experienced first-hand, lending credibility to the other theories in it.

Here are the stages of a startup’s lifecycle according to the author:

• Courtship – excitement, reality tested, realistically committed founder, product orientation
• Infant – risk does not evaporate commitment, negative cash flow, hard work nourishes commitment, no managerial depth, no systems, no delegation
• Go-Go – arrogant founder, decisions based on intuition, centralized, too many priorities
• Adolescence – conflict between decision makers, temporary loss of vision, founder accepts organizational sovereignty, yo-yo delegation of authority, policies made but not followed
• Prime – firing on all cylinders, insufficient managerial training, limited in-fighting, cash is improving
• Stable – lower expectations for growth, focus on past achievements instead of future, reward “yes men”, more interested in interpersonal relationships than risks
• Aristocracy – money is spent on benefits and facilities, emphasis on how rather than what and why, formality in dress and tradition, low internal innovation, cash rich
• Early Bureaucracy – emphasis on who caused the problem rather than what, much conflict and infighting, paranoia freezes the organization, focus on internal turf wars and not customers
• Bureaucracy – many systems with little function, focused inwardly, no sense of control, customers must develop elaborate approaches to work effectively
• Death – no one is committed to the organization anymore

The early chapters though Aristocracy are useful for most entrepreneurs and the book is worth skimming for connoisseurs of corporate lifecycles.

What else? What are your thoughts on the proposed stages of a startup’s lifecycle?