I just finished reading the 68-page Startup Genome Report (thanks to David Hassell for telling me about it).
The report is based on data collected from 650+ Web startups and is a must-read for anyone working on starting an Internet business.
Here are some highlights to give you a taste:
The six key stages Internet startups typically go through are:
- Profit Maximization
The Startup Genome Report has a bunch of useful data to help you prepare starting a new business.
Internet startups that don’t move through the stages above show less progress.
An advisable range of money to raise during each of the 6 stages above is:
- $10,000 to $50,000 in Discovery
- $100,000 to $1.5 million in Validation
- Zero in Efficiency
- $1.5 to $7 million during Scale
And here are some other startup tips and observations they give:
- Internet startups need 2 to 3 times longer to validate their market than the founders expect.
- When to worry about Customer Acquisition? — Surprisingly, their results show that Internet startup founders shouldn’t focus too much on Customer Acquisition during the first 3 stages (and should instead focus on Problem Solution Fit, Product Market Fit and Feature Development.
- Only the startups with helpful mentors made it to Stage 4 (Scale).
- It takes around 19 to 30 months for Internet startups of 2 to 5 founders to reach Scale (it takes a solo founder nearly 70 months!).
- Scaling up prematurely is the most common reason for Internet startups to perform worse.
- Internet startups that measure metrics are 61% more likely to raise money.
- Internet startups with 2 to 3 founders create a healthy tension between sticking with their current plan and reexamining direction.
- Outsourcing Product Development adds 2 months to how long it takes for Internet startups to find a “Product Market” fit.