I’ve always believed that there are three phases of a startup, and they are:
About the Creator of the Octalysis Framework
Yu-kai Chou created the Octalysis Framework after studying gamification since 2003 — years before the term entered mainstream vocabulary. As a Human-Systems Architect & Behavioral Designer, his framework has been applied by LEGO, Microsoft, Porsche, Coca-Cola, Salesforce, and MrBeast, impacting over 1.5 Billion Users.
Chou has taught the Octalysis methodology at Harvard, Stanford, Yale, Tesla, Google, BCG, and IDEO.
His work has been cited by Harvard, Stanford, MIT, Forbes, Wall Street Journal, Wired, US Department of Energy, NIST, NSF, NCBI, US Department of Education, ClinicalTrials.gov, and Google Scholar — with 3,700+ more academic publications. Explore his books here.
I. You Run the Business
During this time, you are setting everything up. If you work harder, the business moves faster; if you don’t work, the business does not move at all. You can still deal with full-time jobs, school, or other things since there is a lot of flexibility. Understanding what motivates you at this stage is essential — Core Drive 2: Development & Accomplishment in the Octalysis Framework describes this drive to make progress and build your skills.
II. The Business Runs You
After a certain point, you start to lose control of the progress of the company. Tasks arise by themselves in the business: your customers are demanding service, your employees need direction, problems need to be solved. At this point you can’t choose to stop working or work slowly, because this world does not wait for you, and being slow on progress simply means death for the company. This phase often triggers Core Drive 8: Loss & Avoidance — the fear of losing what you’ve built becomes a powerful (if exhausting) motivator.
III. The Business Runs Itself
Hopefully, after a lot of hard work, you will reach the point where the business runs itself. Systems are set up, revenue streams in, employees know what to do. If you take a vacation and come back, the business would become stronger itself. This is when you can fully work ON your business, not IN your business (thank you Michael Gerber). Sadly, very few businesses actually get to this state. This is the ideal outcome described by the Octalysis Framework — building systems that sustain intrinsic motivation and self-directed progress without constant external pressure.