First Round interviewed 700 startup founders to discover the State of Startups 2016 and here’s what they found:
- 22% fewer founders think we’re in a bubble compared to last year.
- 9 out of 10 founders believe now is a good time to start a company.
- 18% of founders believe they’re building a unicorn or $1 billion+ company. Okay…
- 72% believe there will be more M&A activity in 2017.
- Alphabet (Google’s holding company) is the ideal acquirer, with Facebook, Amazon and Salesforce next.
- 2/3 believe investors to have the upper hand in deal negotiations.
- Men & women differ in their views on the causes for lack of diversity: men are more likely to blame the pipeline into tech; women place greater emphasis on unconscious bias and lack of role models.
- 61% of all boards are all-male.
- Bitcoin is overhyped.
To me this is all very well and interesting but the key point is this…
Founders’ top-3 challenges: 1) Hiring top talent, 2) Acquiring customers, 3) Increasing revenue
Ultimately, unless you acquire customers, your startup will not generate any revenue and will not attract any funding, and it will die. Sorry.
“Connecting with a prospect now takes 18 or more phone calls, callback rates are below 1%, and only 24% of outbound sales emails are ever opened.” Outbound B2B sales is no longer viable. Referrals and peer-recommendations however are thriving. According to Laurence Minsky and Keith A. Quesenberry at HBR the way to drive this through is social selling, whereby: “salespeople use social media platforms to research, prospect, and network by sharing educational content and answering questions. As a result, they’re able to build relationships until prospects are ready to buy.” GOOD STUFF
How do you get your startup off the ground, fast and on your own terms? First, build-up a cash stock-pile so you can become your own investor. Do this with a services business or consulting. Use that stockpile to build your MVP, validate your idea and get early traction. This puts you in a strong position to negotiate a good deal with investors – if you need it at all. Mitchell Harper has bootstrapped and raised VC money but he recommends this tried-and-tested approach every time. EXCELLENT
Insights via Twitter
I find that many companies are under-using Twitter Analytics to help them generate more leads and sales. If that’s you, here are five insights you’re missing: 1) Track audience growth, 2) Discover how your audience is made up, 3) Learn how visible and engaged your posts are, 4) Discover your top content, 5) Reveal your top-performing blog content. USEFUL
State of European Tech
According to this Atomico / Slush research, in terms of deal flow and amount being invested, now is the best time in history to start a startup in Europe. NICE
The Most Innovative VC Firms
Investor and entrepreneur Stefano Bernardi walks us through today’s most innovative VC firms. EXCELLENT
The Most Active Corporate VC Firms
Investment into startups by corporations is huge and CB Insights spill the beans on who’s doing the most right now. INSIGHTFUL
Financial Services Tech 2020 & Beyond
Pwc identify the top-6 priorities for financial services players to avoid being disrupted by 2020: 1) Update your IT operating model to get ready for the ‘new normal’, 2) Slash costs by simplifying legacy systems, taking SaaS beyond the cloud, and adopting robotics/AI, 3) Build the technology capabilities to get more intelligent about your customers’ needs, 4) Prepare your architecture to connect to anything, anywhere, 5) You can’t pay enough attention to cyber-security, 6) Make sure you have access to the necessary talent and skills to execute and win. No prizes for guessing the one I’m focussed on. TAKE HEED
Why Machine Learning is Hard
S. Zayd Enam is an AI researcher and here he explains why implementing machine learning is hard. Without wishing to spoil the punchline, it has to do with how hard it is to debug an AI system. EXCELLENT
AI is the New Divide
Enrique Dans is Professor of Innovation at IE Business School and a blogger. He argues that “companies will be divided between those who are able to take advantage of artificial intelligence and machine learning for their day-to-day operations, and those that continue to operate as they always have, making them much less productive and much more unpredictable. We are talking here about the emergence of a new digital divide, a virtually Darwinian event in terms of competitiveness.” MANDATORY
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