Establishing milestones for a startup is essential for long-term success. But, as with all the steps involved in starting a small business, it can be difficult to identify what expectations to set and what benchmarks to track, leading some entrepreneurs to set unrealistic goals for their brand.
On this episode of The Small Business Show, host Shyann Malone is joined by George Deeb, managing partner at business growth consultancy firm Red Rocket Ventures, author of “101 Startup Lessons: An Entrepreneur’s Handbook,” and Forbes contributor. Having helped many startups scale their organizations into successful companies, Deeb shares his insights into how small business owners can use realistic milestones to track their progress and earn both consumer and investor support for their products.
Key Takeaways
1. Deeb emphasizes the critical role milestones play for startups, not just for internal business tracking but also for attracting venture capital investment. These milestones signal to investors that a business is on the right path and achieving its targets, making it a viable investment opportunity.
2. Deeb identifies four areas of progress that small business owners should track using milestones: product development, talent acquisition, business development, and user acquisition. Progress in these areas is fundamental to proving a business’s value and potential to investors.
3. Business growth is segmented into three phases: turning a business plan into a minimum viable product (MVP), evolving the MVP into a full production product, and finally, proving the market demand through customer acquisition and revenue generation. Each milestone typically takes around six months to achieve, but each is necessary to illustrate that the company is on a structured path toward establishing a solid business foundation.
4. Before reaching the proof-of-concept stage that attracts venture capital, startups may need to rely on alternative funding sources such as angel investors, bootstrap financing, or personal funds. This stage is critical for sustaining the business until it can demonstrate enough growth and potential to secure more substantial investments.
5. Deeb advises against overinvestment in the initial stages of product development. Startups should focus on creating an MVP that offers just enough functionality to attract interest and demonstrate potential before tackling more ambitious milestones. This approach not only conserves their resources but also enables faster market entry, which is crucial for capturing early adopters and gaining a competitive edge.
"I would not overinvest out of the gate...You need some bare basic functionality that'll get people excited about your business. Don't invest in a Rolls Royce. You don't need all the bells and whistles. You're perfectly fine building a Toyota to get the job done at a much lower cost and, more importantly, at a faster pace of development." — George Deeb
