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The Four Phases

You MUST complete each phase before proceeding to the next.

Phase 1: Validation & Vision (0 to 1)

BEFORE building a company:

1. Solve a Real Problem (Pain Killer)

   • Is this a "Vitamin" (Nice to have) or "Pain Killer" (Must have)?
   • Mom Test: Don't ask "Is this a good idea?" Ask "When was the last time you had this problem?"
   • Validate Market Size: Is the TAM (Total Addressable Market) big enough to support a business?

2. The MVP (Minimum Viable Product)

   • Build the smallest thing that delivers value.
   • Do things that don't scale: Manually onboard users. act as the "AI" behind the scenes.
   • Speed: Launch before you are comfortable.

3. Founding Team Alignment

   • Agree on equity split (vesting is mandatory).
   • Agree on roles. Who is CEO? Who is CTO?
   • Agree on exit strategy/vision (Lifestyle business vs Unicorn?).

Phase 2: Traction & Product-Market Fit (PMF)

Survival mode:

1. The One Metric That Matters (OMTM)

   • Focus on ONE number (e.g., Weekly Active Users or Revenue).
   • Ignore vanity metrics (Registered Users, Likes).
   • Goal: Get the graph to go up and to the right.

2. Sales & Distribution

   • Founder-Led Sales: You must sell the first 10 customers yourself.
   • Talk to users every day.
   • Iterate product based on why people don't buy.

3. Runway Management

   • Watch the Burn Rate. Cash is oxygen.
   • Rule: Default alive. Assume you won't raise more money.

Phase 3: Building the Machine (1 to 10)

Transition from Doing to Delegating:

1. Hiring the Core Team

   • Hire for slope, not intercept (Smart learners > Expensive experts).
   • Culture fit is non-negotiable. One toxic hire kills a startup.
   • Delegate: Fire yourself from jobs (e.g., Hire a Sales lead, then a Product lead).

2. Process Implementation

   • Move from "Tribal Knowledge" to "Documentation."
   • Establish a cadence (All-hands, planning cycles).
   • Goal: The company runs without you in the room.

3. Fundraising (Optional but common)

   • Build the narrative/deck.
   • Treat fundraising as a full-time sales process.
   • Don't let fundraising distract from running the business.

Phase 4: Scaling & Culture (10 to 100)

The CEO job:

1. Hold the Vision

   • Repeat the mission until you are sick of it. Then repeat it again.
   • Ensure alignment as new layers of management are added.

2. Protect the Culture

   • "Culture is what happens when you aren't looking."
   • Reward behaviors you want to see. Fire for violations of values.

3. Executive Management

   • Manage your direct reports (VPs/Heads of).
   • Focus: Strategy, Capital Allocation, and Hiring Key Leaders.

Red Flags - STOP and Follow Process

If you catch yourself thinking:

• "If we build it, they will come." (They won't. You need distribution).
• "We need to hire a VP of Sales before we have a product." (Premature scaling).
• "I'll worry about the legal contracts later." (Co-founder disputes kill companies).
• "Competitor X does this, so we must too." (Distraction).
• "We are running out of money in 1 month." (You reacted too late).
• "I'm too busy to talk to customers." (You are failing).

ALL of these mean: STOP. Return to Phase 1/2.

Quick Reference

Modern Fundraising (2026)

• Pre-Seed: - (idea)
• Seed: - (traction)
• Series A: - (revenue model)

Pitch Deck (10 slides)

1. Problem, 2. Solution, 3. Market Size
2. Traction, 5. Business Model, 6. Team
3. Competition, 8. Financials, 9. Ask

Growth Metrics

• CAC:LTV Ratio: Target 1:3
• Payback Period: <12 months
• Rule of 40: Growth% + Profit% > 40%