Essay and expanded discussion and analysis at the article. Key conclusions:
While there are many takeaways from the study and the charts above, these were the strongest signals to me:Detailed observations (graphs and charts in the article)
1- Yesterday’s “Super Founders” (at least one previous exit over $50M or $10M+ annual revenue) create billion dollar companies of today.
The word “Serial Entrepreneur” has been misused and doesn’t mean much anymore, so the term “Super Founder” is a suggestion for something concrete. Basically, a founder with a previous real exit (no asset sales, no acquihire, no paper valuation)
2- For founders, overall work experience matters, directly relevant industry experience matters much less.
3- These startups were disproportionately built in markets that were already huge and the large majority didn’t create a new demand.
4- Competition is good, or at least not an extinction risk; the super-majority of these startups competed with multiple large incumbents at the time of founding.
5- Product differentiation matters a lot; these companies had very high differentiation in their core product/offering versus what was out there.
1) Two or Three Is The Most Common Number of Co-founders
2) More than Half of the Founding CEOs Are Over 35 Years Old
3) Founding CTOs/CSOs Have An Even Wider Age Distribution
4) SaaS/Enterprise Founders Are Younger, Health/Pharma Founders Are Older, Consumer Founders Are Not Just Millennials
5) 50% Have Over 10 Years of Work Experience
6) Directly Relevant Industry Experience Does Not Matter; It Matters Even Less For CxOs
7) Almost 60% Are Repeat Entrepreneurs
8) The Repeat Entrepreneurs Founded and Led a Couple of Startups Previously
9) Almost 70% of Repeat Entrepreneurs Had Previously Founded A Successful Company (Let’s Call Them “Super Founders”)
10) Some of the Founding CEOs Had More Than One Successful Prior Exit
11) Bachelors and MBAs Are The Most Common Degrees Among Founding CEOs
12) Half of CxOs Went To Grad School (Mostly Technical)
13) As Many Technical CEOs As Non-Technical CEOs
14) The Founders Had Previously Worked In Tier 1 Companies
15) Google, Oracle, and IBM Are the Biggest Billion Dollar Founder Producers
16) Previous Work Experience in Other Startups (Not Founded By Themselves) Does Not Matter
17) Stanford, Harvard, and MIT, But Also Some Lesser Expected Universities
18) This Is For Fun. A lot of Johns, Robs, and Daves
19) Most Common Themes: Cloud, Data, Mobile, Marketplace
20) Software Is Eating the World, But Not All of It
21) Social, E-Commerce, Network, Database, Biotech, Automation Are The Largest Sub-Sectors
22) Biotech Companies Go Public Fast, FinTech and Software Companies Stay Private For Longer
23) Cancer, Ride-sharing, Lending, and Autonomous Vehicles Were The Buzzwords
24) 2000 And 2008 Crashes Did Have An Adverse Effect — Also 2017 Was An Exception
25) Many Companies Did Not Have Much Engineering Complexity, And a Disproportionately High Number Were Deep Tech
26) Similar Number of B2B and B2C Companies, Very Few Doing Both
27) If You Can Raise the Money, High CapEx Companies Work Too!
28) 2008–9 Was Peak of Enterprise, 2011–12 Was Peak Of Consumer
29) Over 50% Were Competing With Multiple Incumbents At the Time of Founding
30) Engineering and Network Effects Are The Most Defensible
31) The Product Matters! Most Startups Had Very High Differentiation in Their Core Product Offering With Competitors
32) The Market Was Already Large At The Time Of Founding
33) In Over 65% of Cases, Their Aim Was to Get Market Share From Others, Not To Create A New Market
34) It’s Hard to Crack The Secret To Timing! You Can Be First, Among the First, Or Last!
35) You Need to Be A Pain Killer, But Vitamin Pills Work Too!
36) Save Time, Save Money, Or Make Things Easier
37) California is By Far Home To the Highest Number, Followed by New York and Massachusetts
38) Almost 90% of These Companies Did Not Go Through Any Accelerator Program. Of the Rest, YCombinator Is №1
39) Over 90% Are VC-Funded
40) Tech Companies Have Mostly Raised ~$250M, Pharma/Health Companies Have Raised ~$400M
41) 2009 and 2012 Seed Rounds Produced The Highest Number of Billion Dollar Companies
42) The Valuations Follow The Power Law. Over 50% Between $1-$2Bn
43) Tier-1 VCs See The Best Deals, Get The Highest Returns
44) Ex-founders Make the Best Angel Investors
45) Early Stage Investing Is Hard
46) Late Stage Funds Get Into More Billion Dollar Companies
47) They Raised Money Quickly, and Kept Raising Quickly
48) They Were Large and Expensive Deals From The Very First Round
49) Tech Unicorns Became a Unicorn Very Fast, In Some Cases In Just Two Years
50) The Seed Round Has Grown From <$0.5M Into Multi-Million Dollar Rounds
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