Every entrepreneur sees a bigger picture when building a Startup. However, a lot goes around that we do not see all we notice is the popularity they gain and set an example for others looking to build a Startup.
Look at big brands like Uber, Google, Airbnb, Silicon Valley Startups, and many others. How do you think they managed to get up there? Well, some facts can leave you wondering and questioning your Startup knowledge.
This article will discuss 21 facts about startups to help you understand more about them.
This is going to be fun so let’s jump straight to it.
#1. Most Startups Fail
Running a successful Startup requires a strategic plan with a clear story backing up the idea. Most successful ones have a story behind them, a lot of research done on the target market, an organized and determined team, and enough capital to put the business on the next level.
These factors are critical when it comes to a startup and its future success. However, some factors and mistakes may lead to the failure of a startup. According to a study by CBI, insights showed that most startups fail due to poor market research before launching a product or service.
Over 40% of these have failed due to poor market research, leading to the production of unlikable products or services. Serving the right market is one of the most important things to consider. Without a market, your startup has no future.
Understanding the size of your target audience and the number of competitors in that field helps know if your business stands a chance to grow and succeed. A good business idea is not good enough, a good startup business model must be profitable and scalable for business continuity.
Most of these startups fail while reaching their second year in business. Only 30% of these startups survive till 10 years.
#2. There are 3 new Start-ups every second worldwide
Another fun fact about startups is that three new startups are invented globally every second which is about 10,800 start-ups in an hour and 259,200 a day. The U.S. alone averages 3 new startups per minute.
#3. They get investments from surprising places
The days are gone when startups had to rely on banks and investment firms. Now they can turn to a wide variety of investment opportunities ranging from angel investors to crowd-sourcing.
In 2010, angel investors raised $20.1 billion in capital for 61,900 ventures, which led to 370,000 jobs, or almost half of the private sector jobs created that year. However, only an average of 10-15% of ventures manage to get funding.
#4. Most of them are not concerned with equity splits.
According to Noam Wasserman, the author of “The Founder’s Dilemma” 80% of startup founders spent less than an hour negotiating their equity split.
#5. Most Founders don’t stay on as CEO
Most founders start their business with the idea of retaining their role as the company CEO. however, most of them end up taking a backseat due to a lack of the right skills to run the business.
This could be their idea or the innovation driving the business. 52% of startup CEO are removed from their role during the third round of company funding.
#6. Men own about 73% of Startups.
About 73% of startups are owned by men meaning only a few women own startups. This might be due to the ‘confidence and risk-taking capabilities between men and women.
Women tend to worry about their job security as well as their kids’ future more than anything else they desire. In addition, the many prototypes of women as a CEO also may lead to fewer investors.
#7. Most Startups have a humble beginning.
About 69% of startups start their business from a home office. Building a startup doesn’t require a studio or an office. You might be surprised to learn that million-dollar startups such as Google, Apple, Disney, Facebook, etc have stories that can shock you.
Where you built your startup has no walls to block success of the startup. For instance, Mark Zuckerberg, the founder of Facebook, started from the Harvard dormitory.
You might have assumed that Facebook started big as it currently is in the Social media industry. 18 years down the line, Facebook has about 2.9 billion monthly users with a market value worth over $560 billion.
Starting small is a philosophy that is eventually becoming a serious driving force for many startups today.
#8. Machine Learning startups are the future.
Artificial intelligence is a groundbreaking technology that is going to revolutionize almost every industry. AI is becoming a darling field for most tech lovers and it is going to make things better from online filtering of extremist content to facilitating workplace and home automation.
AI startups are getting more favored by Venture capitalists because they promise the potential to offer a huge return on investment in the future. Big companies like Microsoft, Facebook, Google, Dell, Apple, etc are investing huge amounts of money into AI Research & Development.
Research shows that the world’s machine-learning market was valued at around 3.39 billion in 2019. The startups based on machine learning are expected to grow by 36% between 2021-2027.
#9. Technical co-founders are critical to enterprise startups.
According to First Round Capital, first-round enterprise companies with at least one technical founder perform a full 230% better than non-technical enterprise companies.
However, consumer companies with at least one technical co-founder underperform completely non-technical teams by 31%.
First Round Capital refers to a venture capital firm that provides seed-stage funding to technology companies. The ‘First Round Capita’ was founded by Josh Kopelman and Howard Morgan.
#10. Most startup founders are school dropouts
Some of the most successful and popular startups were started by school dropouts. A good example is Mark Zuckerberg the founder of Facebook, Bill Gates the Founder of Microsoft, Steve Jobs the Founder of Apple, Michael Dell the Founder of Dell, Evan Williams the Co-Founder of Twitter, Jan Koum the Co-Founder of WhatsApp, Larry Ellison the Founder of Oracle, Travis Kalanick the Founder of Uber, and Julian Assange the Founder of Wikileaks the list is long.
However, this is no guarantee that every school dropout can turn out to be successful like all the founders mentioned above. We talk more about their success and ignore the untold efforts behind the success. People like Steve Jobs are hardworking and also have a shrewd business sense and prodigious intelligence which lead to their success.
#11. Is a Bachelor’s degree important for a startup?
The answer is Yes. over 90% of entrepreneurs hold a bachelor’s degree and some are even MBA graduates. I know the thought of Mark Zuckerberg, Steve Jobs, Elon Musk, etc might make people think they can move forward with the image that building a startup does not need a degree but the truth is you need it.
Academic Qualification will help learn new skills which help boost your startup at the initial stage. Well, if you didn’t qualify to enroll for a degree then Steve Jobs and the likes can act as a motivation for you to give it a shot.
#12. India is the 3rd largest country in the startup ecosystem.
The Indian government has been more than dedicated to supporting the startup ecosystem in the country. India is now becoming the world’s fastest-growing country when it comes to the startup ecosystem with 107 unicorn startups as of 2022.
India was declared as the 3rd top country hosting unicorn companies for the year 2021, displacing the UK from the 3rd position. The total number of recognized startups in India is over 72,000 as of 2022. The startups in India help in creating more than 50000 jobs per year.
#13. Startups require a lot of money
Every innovator and entrepreneur do all in their power to pitch their ideas and attract financial investments. A great startup with the right idea and a powerful business model can easily attract investors since investors believe they can go global quickly, disrupting the existing system and building a new global market leader.
Startup statistics show that in 2020 funding grew by $ 16 billion and in January 2021 $ 8 million in startups were funded globally in that month.
#14. Startups are mostly for risk-takers & Niche-finders.
Success is a risky road it has ups and downs but the confidence to take that risk is the beginning of success. Your success as a risk taker depends on how far you are willing to go to accept risks and turn them into opportunities.
Startups are driven by an entrepreneurship mindset, that compels one not to fear risks but to embrace and get the best from them. Most startups have succeeded because the founders are hardcore risk-takers and Niche-finders.
Take a look at Elon Musk who went behold what many soo any impossible and started SpaceX which revolutionized the space vehicle and rocket-launching technology.
#15. Unicorn Club is for startups
The term unicorn is used for startups that are worth over a billion dollars. The club includes big and popular startups like Uber, SpaceX, Google, We-work, Pinterest, etc.
The major companies that are part of the Unicorn Club are from the first three leading countries in the startup ecosystem. These countries are the U.S., China, and India. As of November 2022, the Unicorn Club comprises more than 1,200 unicorn companies.
#16. Edtech is a booming industry
The education industry faced real challenges in 2020 due to the pandemic which led to a rise in startups providing different services and products. Research predictions say that by 2030 most universities will shift completely to a digital form of learning where online courses will be part of the syllabus.
#17. Many believe working in a startup leads to a stable career.
Most people believe working in a growing startup is more beneficial than working in an entry-level job in a big firm. This is because with a startup you have the opportunity to grow and learn more.
Startups provide more opportunities and responsibilities to its employee who gets to learn to work under a CEO as compared to big organizations which have reached stability point and are no longer growing.
#18. Information companies startups are more likely to fail.
The statistics brain Research Institute did research on startup failure by industry and the outcome showed information companies at the bottom. On average, only 37% of the information companies are still operating after four years.
On the other hand, real estate, finance, and insurance are the most likely to remain in business with over 58% of them still running after four years.
#19. A startup by a team most of the time succeeds.
Teamwork is always the best, especially in a new venture. Startups with more than one founder, a balanced team, or highly skilled employees to distribute work are more likely to succeed.
A startup with one founder takes 3.6x longer to reach scale compared to a founding team of two or more. A balanced team raises 30% more money and has an average of 2.9x more growth.
#20. Most people think that startups are only tech-based.
Out of misconception, most people rigidly believe the word “startup” is about technology businesses only. This is because large companies like Google, Uber, Facebook, and Airbnb are all tech-based startups.
This has influenced a false connotation of the actual meaning of a startup. A startup is a company in the first stage of operation working to solve a problem where the solution is not obvious and success is not also guaranteed.
Many startups are not tech-based such as We-work, Pinterest, and Tinder among others.
#21. Most Startups raise from rejection
Most startups like Netflix and TATA motors raise from rejection. BlockBuster rejected the Netflix partnership offer in 2000 with the founder of Netflix Mr. Hastings getting laughed out of the room.
In 2010, Blockbuster went bankrupt and Netflix is now as of November 09, 2022, a $117.25 billion company. Sometimes the big companies reject a growing innovative startup which ends up being their competitor or even knocking them out of the market completely.