Stage 2

Entering stage 2 begins the transition of the company into an entity with real employees, product development and/or, as soon as possible thereafter, some revenue generation.  A different management style and focus must be implemented, but usually founders can easily make this first shirt.  It is not likely that you really have your secret sauce down yet, as you are still experimenting with what the market and customers want, how much they will pay for it and how to get to the customer for an efficient sales and marketing plan and process.

Time can become the enemy at this stage as a real burn rate is established, which might grow.  Typically the senior executives are wearing many hats at this stage. There is much leverage in a quality, experienced management team to shorten this part of the corporate life cycle and to limit the burn of capital by figuring out everything you can ASAP. The key to success is being adaptable to the market and quickly identifying what customers will pay for that you can deliver as quickly as possible. There is trial and error happening daily and yet keeping up the front to employees that you know what you are doing can be a challenge.  The heat seeking missile is a good analogy for the iterative process that will hone in on the market niche that will support the business quickly.