Grace Ashiru
At the Global Entrepreneurship Congress in Melbourne, Startup Genome unveiled “The Scaleup Report.” Spearheaded by JF Gauthier, Startup Genome’s Founder and CEO, this report delves into the nuances that differentiate successful scaling startups from the rest. It offers invaluable insights for entrepreneurs, business support entities, and policymakers aiming to increase the number of startups reaching over $50 million in valuations.
The report’s foundation lies in an extensive dataset on startup ecosystems, accumulated from a decade-long in-depth study involving numerous metrics from tens of thousands of startups. This data, combined with insights from industry leaders like the Global Entrepreneurship Network and Dealroom, makes the report a culmination of over ten years of independent research by Startup Genome.
Key Insights from “The Scaleup Report” include:
– Strategy for Founders: To optimize scaling chances, founders should provide stock options to all team members, establish over five global ties to top ecosystems, and engage at least three advisors for their ventures.
– Local Connectedness & Revenue: Startups with a Local Connectedness Index score above 6 have a 5.1% scaleup rate, notably higher than those scoring between 2 to 4. Enhanced Local Connectedness is linked to doubled revenue growth.
–Global Ties & Scaling Success A direct relationship exists between scaleup success and Global Connectedness. Ecosystems with strong ties to global hubs like Silicon Valley, NYC, and London witness their startups achieving global recognition at a much higher rate.
–Global Scaleup Leaders: The U.S., China, and the U.K. dominate in total scaleups. The U.S. boasts 7.1K scaleups, significantly outpacing China and the U.K.
– Venture Capital Investment, The U.S., China, India, the U.K., and Germany are the top countries for V.C. investment in scale-ups. North America dominates with 55% of global V.C. investments, with the U.S. contributing 53%.
– Global Expansion & Revenue*: Early-stage startups with a majority foreign customer base witness doubled revenue growth. Non-U.S. startups targeting global markets from the start see their scaleup rate double.
B2B & Global Focus: B2B and hybrid startups focusing globally from inception have higher scaleup rates than B2C ones. B2B startups with an initial global focus achieve a 6.8% scaleup rate.
–Serial Founders & Motivation: One-third of current scaleups are helmed by serial entrepreneurs, with an 85% higher scaleup rate. Founders motivated by wealth accumulation are most likely to succeed in scaling, followed by those driven by change and product excellence.
Funding Sources: Founders funded by friends are more inclined to achieve scaleup status than those relying on personal or familial resources.
Age & Scaling Success: Founders aged between 26-40 exhibit the highest scaleup success in rate and total number.
JF Gauthier, the visionary behind Startup Genome, aptly comments, “The billion-dollar question has always revolved around the traits and decisions of early-stage startups that amplify their scaling success chances.” The Scaleup Report, backed by 11 years of primary research involving almost 100,000 global startup founders, offers evidence-based answers to this crucial question.
Jonathan Ortmans, the initiator and head of the Global Entrepreneurship Network, recognizes the report’s significance, underscoring its pivotal role in pinpointing the determinants of success for burgeoning scaleups. Yoram Wijngaarde, the chief executive of Dealroom, asserts that startups have the potential to scale irrespective of their geographical location, signaling the emergence of a new era of global innovation.
For those interested in a more in-depth analysis of this report, it’s accessible in its entirety at Scaleup Report (made available since September 20).
