Startup Genome Report Seeks to Identify the DNA of Entrepreneurship

Entrepreneurship is often thought of as an art, a skill honed over time – but could there be a scientific component to it as well?  That is what co-authors Bjoern Lasse Herrmann and Max Marmer set out to find in a recently released study, The Startup Genome Report.

The report, based on surveys of over 650 Silicon Valley Internet startups, sets forth several clear stages of a startup’s development and identifies distinct types of companies. The project’s aim is to make this data widely available in order to increase the success rate of startups and accelerate the pace of innovation around the world.

The report outlines several relevant trends and conclusions about the DNA of a successful startup.  A few of the more noteworthy findings include:  

• Founders that learn are more successful.  Startups that have helpful mentors, track metrics effectively, and learn from startup thought leaders raise 7x more money and have 3.5x better user growth.
• Solo founders take 3.6x longer to reach scale stage, compared to a founding team of two.  Balanced teams with one technical founder and one business founder raise 30 percent more money, have 2.9x more user growth and are 19 percent less likely to scale prematurely than technical- or business-heavy founding teams.
• Startups need 2-3 times longer to validate their market than most founders expect.  This underestimation creates the pressure to scale prematurely, which is the most common reason for startups to perform poorly. 
• Startups that haven’t raised money over-estimate their market size by 100x and often misinterpret their market as new.
• Most successful founders are driven by impact rather than experience or money.

Access the The Startup Genome Report here.