As a startup & scale up entrepreneur, investor, coach and generally being in business for over 20 years, I have experienced many different situations. I experienced successes and failures alike. A couple of years after I was done with my MBA, I started to read research and books on success and failure in businesses and specifically startups and scale ups. One thing becomes clear, there is not ONE silver bullet. It just does not exist. But there are many learnings! Yes every business, team and idea is unique. But there are similarities or ‘cliches’ if you want. I combined my personal learnings with research from studies and books (see sources below) where I could. The learnings are organised according to topic.
FOUNDERS & TEAM
1. Founders that learn fast and know how to use their learnings in their business are more successful. Startups that have helpful mentors, track performance metrics effectively, and learn from startup-thought-leaders, raise 7x more money and have 4x better user growth.
2. Solo founders take 4x longer to reach scale stage compared to a founding
teams of 2 or more. Solo founders are less likely to pivot.
3. Business-heavy founding teams are 6x more likely to successfully scale with
sales-driven startups than with product-centric startups.
4. Technical-heavy founding teams are 3x more likely to successfully scale with product-centric startups without network effects than with product-centric
5. Balanced teams with one technical founder and one business founder raise 30% more money, have 3x more user growth and are 20% less likely to scale prematurely than technical or business-heavy founding teams.
6. Founders that don't work full-time have 4x less user growth and end up raising 24x less money from investors.
7. Most successful founders are driven by impact rather than experience or money.
8. Two third of founders find out that their initial intellectual property is not a competitive advantage.
9. Startups need 2 till 3 times longer to validate their market than most founders expect. This underestimation creates the pressure to scale prematurely.
PIVOT THE IDEA / STARTUP
10. Startups that pivot once or twice raise 2.5x more money, have 4x better user growth, and are 50% less likely to scale prematurely than startups that pivot more than 2 times or not at all. A pivot is when a startup decides to change a major part of its business.
11. Premature scaling is the most common reason for startups to perform worse. They tend to lose the battle early on by getting ahead of themselves. Startups can prematurely scale their team, their customer acquisition strategies or over build the product.
12. B2C vs. B2B is not a meaningful segmentation of Internet startups anymore because the Internet has changed the dynamics of customer interaction. We found 4 different major groups of startups that all have very different behavior regarding customer acquisition, time requirements, market risk and team composition.
INVESTORS & RAISING CAPITAL
13. Many investors invest 2-3x more capital than necessary in startups in the discovery phase. They also over-invest in solo founders and founding teams without technical cofounders despite indicators that show that these teams have a much lower probability of success.
14. The right mentors significantly influence a company's performance and ability to raise money.
15. Startups that haven't raised money overestimate their market size by 100x and often misinterpret their market as new.
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