In marriage, there’s a so-called “seven-year itch” that takes the blame for so many doomed relationships. In entrepreneurship that same destiny occurs at year five. That’s according to a research based infographic featured on Entrepreneur.com last week. The piece focused on the funding routes and failure rates of startups over the past few years. According to the data, most startups don’t make it beyond five years, with only one third making it to ten years.
Working at the Kauffman Foundation, I believe in the power of data and research. We release our research for the sake of action. Ideally, we’re giving policymakers, government and corporate leaders the knowledge and proof they need to make a change.
So, what are the takeaways of the Entrepreneur.com infographic? Here’s what I found interesting–only 1,500 startups received venture capital funding in 2013. But, if past trends depicted in the infographic continue, they’re more likely to survive than their bootstrapping counterparts. According to the data, of the 6,613 startups that received VC funding between 2006 and 2011, only 4% have failed. That’s a pretty impressive success rate.
Why? Is it just the money? The connections that come with being in a prominent VC’s portfolio? The publicity that can draw in customers? Or are VCs just really good at picking the winners? We know through research that most startups bootstrap. But does bootstrapping mean you’re less likely to make it past the infamous five-year mark?
Hopefully this infographic will have you asking questions as well. Ask them and offer your thoughts on Twitter using #TopOfMind.
Entrepreneurship Is a High-Stakes Game. Know Your Odds Going In. (Infographic)
Roughly a third of all companies last a decade and six out of ten startups last the first three years. Nearly half a million people launched a company in 2013 each month. Where is the cash coming from? About 90% of the cash is from bootstrapping. Check the infographic out to learn more.
China’s Many Types Of Innovation
At the World Economic Forum in Tianjin, Li Keqiang mentioned that China will improve its game in science and technology innovation as well as technological sophistication, quality and brand awareness of the Chinese industry. There are around eight types of innovation in China to date: cost, process, application, supply chain, product, technological, business model and non-customer.
Mark Cuban’s 12 rules for startups
Mark Cuban published his 12 rules on what it takes to be a great business and here they are.
- Don’t start a company unless it’s an obsession and something you love.
- If you have an exit strategy, it’s not an obsession.
- Hire people who you think will love working there.
- Sales cure all.
- Know your core competencies and focus on being great at them.
- Lunch is a chance to get out of the office and talk.
- No offices. There’s nothing private in a startup.
- As far as technology, go with what you know.
- Keep the organization flat.
- Never buy swag.
- Never hire a PR firm.
- Make the job fun for employees.
20 Reasons Why People Get Their Best Ideas in the Shower
Over the past 25 years, this author asked 10,000 people where they get their best ideas. He has gotten a lot of different answers, but the one that has stood out the most is “in the shower”. In this article, you will find out the 20 reasons why people get great ideas in the shower. Here are the first five.
- Showering signals a “new day” or “new beginning”
- You’re usually alone, with time to reflect
- Interruptions are rare
- The rush of water creates a kind of “white noise” that makes concentration easier
- Shower stalls look like incubation chambers
10 Entrepreneur Approaches That Turn Off Investors
Entrepreneurs can’t wait to get their idea and business plan out the door. The truth is, investors see dozens of business plans a day. Read this article to decrease your odds of turning an investor off. The first three are listed here.
- “Give me a call to hear about an opportunity that can’t fail.”
- “Attached is a copy of my full business plan for your review.”
- “I don’t have a business plan, but the technology is disruptive.”