This phase of company-building — Phase I — plays out in four stages. Later, as a company scales and progresses past the minimum viable product stage, it earns its way into the value optimization and sustainable competitive advantage phase (Phase II). Eventually, both phases may operate simultaneously in a company — the discovery phase for new product initiatives, and the value optimization / sustainable advantage phase for the core product.

This stage-by-stage company-building journey looks linear. But of course it’s rarely a uni-directional stroll down a yellow brick road. The reality is more like hopscotch. Just one flawed assumption can force a company backwards from its current stage to the previous one. A significant market shift, such as the rise of a new competitor, can send it all the way back to the beginning. Few make it all the way. Whether by choice or utter failure, the overwhelming majority of companies exit before reaching public company status.

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