Brian Chesky on the three stages of building a company.

2026-05-14 · Source: a16z · Field: Business & Management — Entrepreneurship & Start-ups, Corporate Strategy & Leadership · Depth: Fundamental Awareness, quick

Summary

Starting a company typically involves three distinct stages, beginning with product development until achieving product-market fit. The second stage focuses on scaling the company to grow the product, often involving significant hiring and fundraising efforts. The final stage transitions the company into a more professional and administrative structure, characterized by the recruitment of an executive team. Successfully navigating these stages can lead back to the initial phase of creating a new product, as exemplified by the experience with "Homes" where, after building and scaling the product and establishing an executive team, the company was prepared to innovate again.

Key takeaway

For entrepreneurs launching a new venture, understanding these three stages is crucial for strategic planning. You should prioritize achieving product-market fit before aggressively scaling, and anticipate the need for substantial capital and executive talent as your company matures. This framework helps you prepare for the cyclical nature of innovation and growth.

Key insights

Company growth follows a three-stage cycle: product build, company scale, and professionalization, potentially leading to new product creation.

Principles

• Product-market fit marks the end of initial product development.
• Scaling requires significant hiring and capital investment.
• Professionalization involves establishing an executive team.

In practice

• Focus on product-market fit before scaling.
• Plan for substantial fundraising during growth phases.
• Recruit an executive team for professionalization.

Topics

• Company Building Stages
• Product-Market Fit
• Company Scaling
• Executive Team
• Product Development

Best for: Entrepreneur, Executive, Consultant

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Editorial summary, takeaway, and curation by AIssential. Original article published by a16z.