An interesting new report was published by the Startup Genome Project today. According to its parent, tech accelerator blackbox.vc, Startup Genome is “a research project in collaboration with faculty from Stanford and Berkeley to crack the “innovation code” of Silicon Valley and accelerate the pace of innovation around the world by turning entrepreneurship into a science.” By another description, the researchers aim to “do for startups what Pandora did for music”.
The report, based on a study of 650 tech startups, identifies the characteristics of successful startups and founders. For example, the value of investors vs. mentors, the founding configuration that raises the most funding, and the most common reason for underperformance… the full report is a must read and available for download here. Some of our favorite takeaways:
Companies that are tracking metrics average a monthly growth rate that is 7x companies that are not tracking metrics and are 60% more likely to raisefunding than companies that don’t track metrics. (p10)
Average VCs would draw conclusions by taking a snapshotof just a few data points such as team, traction and market, and their questionswould be focused on metrics like amount of money raised, and unfaircompetitive advantages… Better performing VCs understood that startups are a search process forproduct market fit and a scalable business model. As a result, they drewconclusions based on more subtle data points such as the team’s pace oflearning, why they made certain pivots, the body language between thefounders and stage specific metrics. (p13)
Consistent companies raise more money than inconsistent companies. This means that VCs are also able to intuitively discern how startupsare moving forward, and reward the startups that are moving through the stages considerably more. (p26)
Startups can also complete a survey to benchmark themselves against the results of the study. Respondents will receive “a detailed analysis of your startup personality type, with personalized advice for what to focus on based on aggregate data the startup genome project has collected from more than 650 startups” and a special report “The 7 Signs of Startup Failure” published by the Startup Genome Project. If you take the survey, let us know how valuable these reports are in the comments to this post.
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