StartUp Genome: The Clue to Understanding Why Startups Succeed

The role of technology entrepreneurship in our global economy has never been more important. The Kauffman Foundation found that scalable startups are the engines that drive nearly all economic growth and job creation. But despite the supreme economic importance of scalable startups, the patterns of startup success has just recently been exposed. However, more than 90% of startups fail, due predominantly to self-destruction rather than competition. For the less than 10% of startups that do succeed, most encounter a handful of near death experiences along the way.

To take the next step, the Startup Genome, published a new framework for understanding why startup succeed. On basis of this startup lifecycle (Discovery, Validation, Efficiency, Scale, Sustain & Conservation), they were able to build their first product – the Startup Compass that enables them to synthesize the models of many entrepreneurial thought leaders, such as Steve Blank, Eric Ries, Sean Ellis and Geoffrey Moore.

In a nutshell, the Startup Compass helps entrepreneurs to make better product and business decisions by benchmarking their KPIs against more than 20,000 Internet Startups to allocate resources, diagnose problems, align your team & measure progress. Once a startup signs up, it is directed to a 30 minute assessment, that will automatically determine what type of startup it is, what stage it is in and diagnose them in respect to the primary cause of startup failure: premature scaling. Then it is benchmarked it across more than 25 KPIs against startups who are the same type and stage.

 I recently found out that the Startup Genome is looking to expand its studies to include Latin America.  I am thrilled at this notion because the Startup Genome reports are informative and inspiring.  Showing the Latin American population how its startup ecosystem racks up against the rest of the worlds will be humbling.  I believe it will also act as a call to entrepreneurs across Latin America to stop being afraid of failing and to start building and shipping products!

Entrepreneurship will never become a “paint by numbers” activity, as there is simply too much uncertainty and the world changes too fast. But by providing entrepreneurs with frameworks like the stages of the Startup Lifecycle, failure patterns like premature scaling and benchmarking tools like the Startup Compass, the Startup Genome can improve the intuition of entrepreneurs and their ability to make sense of incoming information about their business.  This is a huge step for Latin America in the right direction!


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