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256 The Bell-Mason Diagnostic

Whatever the ultimate application, if the user becomes adept with the concepts underlying the Bell-Mason Diagnostic, gains sufficient experience or knowledge of the industry, and then applies common sense, he or she is likely to significantly strengthen the start-up's position.

Although the diagnostic attempts to be resistant to the destructive effects of ignorance and denial, which pervade many start-ups, readers should keep in mind that the method is only as good as the people answering the questions and the people evaluating the answers. For example, a company may have a business plan that meets the diagnostic's standards with respect to content, but that content may nonetheless be fatally flawed because the analytic work is poor or the staff has an insufficient understanding of some key issue. Thus, it is possible for a firm to obey all the rules but still fail because the quality level of the organization and/or its product is too low.

 

THE FIVE STAGES OF COMPANY GROWTH

The accompanying flowchart (Figure 10-3) illustrates the stages of growth for high-information-technology ventures, together with the possible outcomes for each stage. These are the same stages that were shown in a computer-program format in Chapter 1. Note that three of the substages of market development also appear in the figure. This section examines each of the five stages in detail and closes with a discussion of the different ways in which a start-up may transition from stage to stage.

 

STAGE I: CONCEPT (0-[3]-6 MONTHS)

The concept stage is the company's starting point. It takes nothing to enter this stage except a kitchen or dining-room table at which to sit and begin exploring and planning the proposed venture. Participants at this stage usually include one or two players who want to develop an idea they have for converting some technology into a product.

The product might be targeted for a market that did not previously exist, as in the case of a newly emerged market. Or it might simply be aimed at a niche of an existing market, such as a performance- or cost-oriented segment of that market. If the product represents a significant improvement in performance or price, the start-up may target it as a replacement in an established, growing, main-line market.

The concept stage can be Initiated from any viewpoint-such as market, technology, or product-but it requires the drive of a core group who have been infected with entrepreneurial fever. Ideally, the founding team includes a CEO who is capable of carrying the team through to stage V, steady state.

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