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A Primer on Startups

A PRIMER on STARTUPS WHAT IS A STARTUP? According to startup founders, there are several key features: Generally a single office (if any) Rigorous culture of innovation Revenues less than $20 million Strives to solve critical pain points of existing frameworks Less than 80 employees Ability to scale quickly, unconstrained by geography Less than 5 people on the board (Forbes, 2013) "MARMER" STAGES The 6 Stages of the Startup Lifecycle (Named after the co-founder of the Startup Genome Report, Max Marmer) stage DISCOVERY (5-7 months) V Establish a founding team v Garner investments from family/friends V Solicit the advice of mentors V Evaluate business potential V Are we solving a problem, and are people interested? v Generate minimally feasible products/services V Join an accelerator or incubator stage VALIDATION (3-5 months) V Expand hiring beyond founding members V Acquire money or attention to verify interest in product V Refine core features v Get first paying customers V Implement metrics and analytics V Obtain seed funding stage 3 EFFICIENCY (5-6 months) V Refine business model v Improve efficiency of V Reinvigorate or overhaul the UX V Achieve viral growth customer acquisition v Find a repeatable sales process V Fine-tune the value proposition V Augment the conversion funnel stage 4 SCALE (7-9 months) V Push aggressively for growth V Acquire a large number of customers V Hire the first executives V Establish departments * Partake in a large round of V Improve the back-end scalability venture funding stage MAXIMIZING PROFITS stage RENEWAL WHERE ARE STARTUPS ESTABLISHED AND WHY? (Ewing Marion Kauffman Foundation, 2014) Metropolitan areas with more college graduates generally produce more startups Regions with access to VC funding don't necessarily generate a higher ratio of startups Higher high school completion rates further increase an area's startup rate Promoting high-tech entrepreneurship does not necessarily elevate the overall economy Larger metros tend to have higher entrepreneurial rates Diverse economies normally found in larger cities are more resilient than those of smaller cities According to the Kauffman Index (Ewing Marion Kauffman Foundation): 0.32% of American adults created a business per month in 2011, among the highest levels over the past 16 years Entrepreneurial activity rates are the highest in the West and lowest in the Midwest States with the highest and lowest rates of entrepreneurship: Top 10 metropolitan areas for high-tech startup density: Boulder, CO (Number of adults per 100,000 creating businesses each month during 2011) Fort Collins-Loveland, CO 3 San Jose-Sunnyvale-Santa Clara, CA Cambridge-Newton-Framingham, MA Seattle, WA I Highest I Lowest 6. Denver, CO San Francisco, CA Washington-Arlington-Alexandria, DC-VA-MD Colorado Springs, CO 10 Cheyenne, WY 440 420 520 160 200 200 200 440 150 410 PA IN IL VA 180 AZ AK TX НГ High-tech startups are a key driver of job creation throughout the United States SIX CHARACTERISTICS OF SUCCESSFUL STARTUPS (Laurence A. Baiada Institute for Entrepreneurship, Drexel University) ABILITY TO IDENTIFY FERTILE GROUND FOR MARKET OPPORTUNITIES 2 COMPELLING VALUE PROPOSITION HIGH-PERFORMING TEAMS 4 EFFECTIVE COMMUNICATION OF A VISION WHICH CONNECTS THE DOTS SUCCESSFUL NAVIGATION OF UNCHARTED TERRITORY 6. CONFIDENCE AND DRIVE FAILURE RATE BY INDUSTRY (, 2014) Year failed in 1ST 25% 2ND 36% 3RD 44% PERCENT STILL OPERATING AFTER 4 YEARS Finance insurance 58% 37% Information and real estate 56% 45% Education Transportation, and health communication 47% and utilities 56% 47% 55% 54%51% Agriculture 49% Retail Services Construction Wholesale Manufacturing Mining WHITE HOUSE'S "STARTUP AMERICA" STARTUP A White House initiative to celebrate, inspire, and accelerate AMERICA high-growth entrepreneurship throughout the nation CORE GOALS ACTIVITIES Unite government agencies, innovative entrepreneurs, corporations, universities, foundations, and others Increase the number and scale of new high-growth firms that are creating economic growth, innovation, and quality jobs Expand access to capital for high-growth startups Celebrate and honor entrepreneurship as a core American value and competitive advantage Inspire and empower a diverse population to build great American companies Expand entrepreneurship education and mentorship programs to help create jobs Increase collaboration between large companies and startups Identify and remove unnecessary barriers to high-growth startups STARTUPS AND MBAS (Forbes, 2013) The majority of successful entrepreneurs and investors have an MBA ils 16% of Stanford's MBA graduates launched startups in 2012 Access to research and top professors for feedback can help students execute on ideas Can provide an opportunity to meet other entrepreneurial-minded students and potential business partners MBA programs are sharpening their focus on entrepreneurship Created for © QuinStreet, Inc., 2014 MBA SOURCES "What is a Startup?", December 16, 2013, "Discover The Patterns Of Successful Internet Startups In The Startup Genome Report,", ssed June 2014, blog.startupcompass tag/report "Beyond Metropolitan Startup Rates: Regional Factors Associated with Startup Growth," Ewing Marion Kauffman Foundation, February 3, 2014, beyond-metropolitan-startup-rates-regional-factors-associated-with-startup-growth "New Business Startups Declined in 2011 Annual Kauffman Study Shows," Ewing Marion Kauffman March, 19, 2012, new-business-startups-declined-in-2011-annual-kauffman-study-shows "Tech Starts: High Technology Business Formation and Job Creation in the United States," Ewing Marion Kauffman, August 20, 2013, tech-starts-hightechnology-business-formation-and-job-creation-in-the-united-states "Six Facts About Successful Startups," Baiada Institute, Drexel University, accessed June 2014, "Startup Failure by Industry,", January 1, 2014, "Startup America Fact Sheet,“, accessed June 2014, "Should Entrepreneurs get an MBA: An inside perspective from and MBA Entrepreneur,, April 4, 2013, 10 should-entrepreneurs-get-an-mba-an-inside-perspective-from-an-mba-entrepreneur/

A Primer on Startups

shared by obizmedia on Jul 11
The stereotype of American entrepreneurial success has evolved beyond recognition. The 20th century image of a polished, suit-clad citizen making phone calls or knocking on doors has made way for the ...


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