According to this infographic by the 'Startup Genome,' only one in 12 entrepreneurs are able to launch a successful business. In order to properly conduct and sustain a company, there are five essential dimensions, which include, funding, business model, customers, product and team. As the chart above depicts, those who commit premature scaling, are most likely to fail.
Companies that do scale prematurely are classified as inconsistent, whereas companies who scale properly are classified as consistent. For example, those who scale prematurely are more likely to have a 50 percent larger workforce then needed, and a 50 percent reduced team after scaling. Inconsistent startups are also more likely to have three times more money in their efficient stage, and 18 times less money after scaling. It is wise for evolving entrepreneurs to plan efficiently before diving in to avoid failure.
Entrepreneurial Life Cycle Infographics
The 'Startup Genome' Study Looks at Why New Ventures Fail
Trend Themes
1. Startup Success Factors - Understanding the five essential dimensions to properly conduct and sustain a successful business: funding, business model, customers, product, and team.
2. Premature Scaling Pitfalls - Recognizing the risks of scaling too quickly and the negative impact it can have on a startup, such as overstaffing and insufficient funding.
3. Efficient Planning for Entrepreneurship - Emphasizing the importance of strategic planning and efficient resource allocation to increase the chances of startup success.
Industry Implications
1. Startup Incubators and Accelerators - Providing support and guidance to help entrepreneurs navigate the startup success factors and avoid premature scaling pitfalls.
2. Business Consulting and Advisory Services - Assisting startups in developing efficient business plans, optimizing resource allocation, and identifying potential scaling challenges.
3. Entrepreneurship Education and Training - Equipping aspiring entrepreneurs with the knowledge and skills necessary to strategically plan, navigate funding, and build successful startups.