Understanding The World Of Startups

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 Factbook 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 the 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. The USA alone has about seventy percent startups amongst top 5 countries. USA and India are the top two startup countries that witnessed the maximum number of deal flows.

USA - The Largest Startup Nation 

With about 83,000 startups, USA is the largest startup nation in the world. The USA has 48,500 technology based and 34,500 nontechnology-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 nontechnology-based startups.

Characteristics Of Startup Failures 

Startups although attractive are 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.