The success and failure of startups

August 30th, 2011

In my forthcoming project No Straight Lines I argue that we have reached the nadir of the adaptive range of an industrialised world, in fact we are now faced with a trilemma of social, organisational and economic complexity, tensions and questions. And therefore face a design problem. No Straight Lines presents a new logic and describes an entirely new way for true social, economic and organisational innovation to happen.

So I was excited to hear of the Startup Genome Report that will be of real value to entrepreneurs as they navigate their way through the ups and downs of success. So what’s it all about?

The Startup Genome is an initiative of blackbox, a seed accelerator co-founded by techVenture and other organizations that have a track record of working with 100+ startups, including 15 exits (such as Bebo, Tapulous & Lala),

Now Blackbox will be releasing the first comprehensive benchmarking application for startups based on the Startup Genome framework.

Three months ago they released the first Startup Genome Report and it went viral throughout the startup ecosystem. To date it’s been covered in more than 150 publications in more than 15 languages, and the report has been downloaded more than 15,000 times. More than 50 Universities and accelerators have adopted the report into their curriculum. The report was a 67-page in depth analysis on what makes startups successful created in collaboration with researchers from Stanford and Berkeley and thought leaders like Steve Blank, Alex Osterwalder and Janice Fraser. Over the last three months the dataset of high growth technology startups has grown to more than 3200 and it is now the largest rich dataset on technology startups. The Startup Genome Compass now allows every founder to receive a personalized monthly report based on the Genome research.

The key problem that this new application, the Startup Genome Compass, is tackling is premature scaling. The Startup Genome Compass is a benchmarking tool that automatically classifies a startup by type and stage, generates a personalized Startup Genome Report and diagnoses them for premature scaling.

The Genome project hopes to help entrepreneurs from scaling prematurely by supporting their decision making with data about the expected values for the core metrics across Customer, Product, Team, Business Model and Financials dimensions.

Based on analysis of about 3200 high growth internet startups 94% of these fail, and premature scaling is responsible for about 74% of these failures.