Ron Berman, a third-year PhD student in the Haas Marketing Group, and his colleagues at seed accelerator Blackbox are turning the study of startups into a science. Through their Startup Genome Project, they are dissecting Internet startup businesses down to their DNA to see what makes them successful–or not.
The Startup Genome Project’s ultimate goal is to increase the success rate of startups and help entrepreneurs make the world a better place.
Dismayed by the fact that more than 90 percent of funded startups fail, Berman and his team set out to find a way to improve the odds of success. After surveying 650 startups over three months, they compiled their initial findings in the “Genome Report,” which was released May 28.
Through analyzing survey data, they found that Internet startups develop by moving through a series of stages, and those that skip any of these stages don’t perform as well as those that go through all of them.
They also learned, among many other things, that:
- Founders who learn, both from mentors and thought leaders, and effectively track metrics, are able to raise seven times more money than those who don’t.
- Solo founders take 3.6 times longer to reach scale stage than two-member founding teams.
- The most common reason that startups don’t perform well is premature scaling.
With both an MS in computer science and an MBA specializing in strategy and entrepreneurship from Tel Aviv University, Berman had the perfect background for his involvement in the Genome Project. “They had the data but had never had any serious experience in how to take that data and do the statistical analysis and get insight from it,” Berman says. “My job was to help them translate an abstract model that was described in words to one that could be applied to data–to translate the model from words to math.”
With its initial research completed, the Genome Project team is beginning to put what it learned into practice. Entrepreneurs who complete its new online survey will receive a detailed analysis of their startup-personality type, what stage their startup is in, and customized advice for what to focus on based on the data collected for the Genome Project. More than 1,000 people completed the survey and 10,000 people downloaded the Genome Report during its first week online.
The Startup Genome Project’s goal: To increase the success rate of startups and ultimately help entrepreneurs make the world a better place.