Generally a business goes through three stages: innovation (create and fine tune the product), growth (increase market share through marketing), and harvest (ma

Generally a business goes through three stages: innovation (create and fine tune the product), growth (increase market share through marketing), and harvest (maintain large customer base). We experienced all three stages with our first company. Each stage is unique. Each requires a different mode of operation. They require different talents, different ways of thinking, and different filters for making decisions. Conventional wisdom says this is the desired course of a business. You start out small, innovate, grow a customer base into a huge corp and then harvest the rewards. After reading Paul Graham's "How to Make Wealth" essay, we had an 'aha moment'. It's not necessary for a business to do all three stages. In fact it's not efficient and usually not desirable. Some people/companies are good at innovation, some are good at growth, and some are good are harvest. Each should focus on their strengths. The model of creating startups and then exiting is about focusing on the innovation stage.