Understanding The World Of Startups

50

Last decade has seen an explosion of wannabe startups. Everyone in the ecosystem is identifying opportunities to piggyback on this euphoria. Nations are framing policies to nurture the entrepreneurship ecosystem. Corporates are creating venture funds to invest in startups. Many renowned media houses are establishing dedicated startup communication channels. To top it all, there are startups covering news of startups and are thriving.

In this burgeoning market of wannabe stars, you must have wondered- how many startups are there in the world? Do all succeed equally, and if not, what are the reasons for their failures? To answer this question, we created the following infographic. We have used data from gem consortium, world bank, CIA Fact book and other freely available resources.

Understanding The World Of Startups

A Look Inside The Startup World

Of the 7 billion people in the world, about forty percent are either too young to work, are over the age of sixty four or are unemployed. Remaining 4 billion primarily work in service industry (1.7 billion), agriculture (1.4 billion), industrial sector (800 million) or are entrepreneurs (472 million). Entrepreneurs make up about eleven percent of the global population. Every year, these 472 million entrepreneurs are trying to set up about 305 million businesses. Only about one third of these (100 million) businesses are launched in the same year and an equal number of businesses are closed in that same year. This means about 274 thousand startups go out of business every day.

A Look Inside The Startup Nations

USA, India, China, UK and Canada make up for the top 5 startup nations that account for more than 117 thousand entities. USA alone has about seventy percent startups amongst top 5 countries. USA and India are the top two startup countries that witnessed maximum number of deal flows.

USA The Largest Startup Nation 

With about 83,000 startups, USA is the largest startup nation in the world. USA has 48,500 technology based and 34,500 non technology based startups. On an average $40 billion annually are invested by venture capitalists in startup funding.

India The Second Largest Startup Nation 

India’s start-up scene has witnessed an explosion over the last couple of years.  India is home to about 10,000 startups. India has 4,300 technology based and 5,700 non technology based startups.

Characteristics Of Startup Failures 

Startups although attractive are a high risk propositions. Many large startups have failed in the recent past. We looked into the available data to understand the nature of these failures. We were able to bucket it under two major categories of adoption and execution failures.

Adoption challenges include business model and revenue model failures. Execution challenges include product development and resourcing failures. At R&P Research we primarily focus on adoption challenges.

Adoption Challenges

  • Business model failures: A major reason why startups fail, is that they find no market for the product or service they have built.
  • Revenue model failures: Most startups fall into the trap of continuing with the initial product or service construct. They fail to innovate on their revenue model and explore revenue growth opportunities.

Most of the startups are becoming good at understanding the consumer pain point and launching the startup, however they fail at revenue model innovation. At R&P Research, we are passionate about helping startups understand and innovate on their revenue models. Reach out to us, if you are interested in innovating on your revenue models.

Previous articleGoogle vs US Media Top-10
Next articleIBM Strategic Imperatives vs Traditional IT Business Growth
Ravi is a healthcare enthusiast, blogger, author, and research director at R&P Research. Ravi is passionate about simplifying the understanding of businesses through visualization. He spends his time researching and writing about business models of Healthcare, Life Sciences, Retail & CPG industries. You can reach him at ravi@revenuesandprofits.com

LEAVE A REPLY