November 10, 2006

Stages in the evolution of a company

Brad Feld provides a framework (created by his friend Barry Culman) to explain the evolution of a company.
Following is a quick summary of the stages according to Barry.

Birth

* Idea created
* Product or service utilized to deliver idea
* All energy on creation
* Leader is the core driver of revenue
* No process or structure
* Project or products – not a business

Teenager

* Add overhead and infrastructure
* Grow revenue base
* Leader comes “in-house”
* Cash is King
* High energy
* All executives involved in all parts of the business
* Everyone feels like “I know what’s going on”

Young Adult

* Add process and structure
* Profitability dips
* Must determine “who we are” / what do I want to be when I grow up
* Leader is an evangelist
* Separation of duties
* External funding
* Loose budget
* People issues being to appear

Adult

* Answer to board / investors
* Tight budget controls
* Consistent processes
* Leader deals with external forces
* Business is in a steady state
* Emphasis on managing people

Senior Citizen

* Death or Rebirth


Arun Natarajan is the Founder of Venture Intelligence India, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of Venture Intelligence India newsletters and reports.