Report: What Makes Silicon Valley Startups Successful

A recent study by the Kauffman Foundation shows that more than 90 percent of the job growth in the United States comes from highly scalable startups, although 90 percent of newly funded startups fail. One-year-old firms create on average nearly 1 million jobs, while ten-year-old firms create only 300,000. These results underline the importance of the startup scene. Yet there is such a lack of research going really into details about its success factors. Why is it so difficult to survive and what are the common mistakes of startups?

Well, here comes the answer: The Silicon Valley based startup blackbox just released a report about what makes startups successful. The authors Bjoern Lasse Herrmann and Max Marmer interviewed 1,000 startups and came to quite interesting results. They defined 4 stages a startup goes through and found out that those who skip one of them, are more likely to struggle.

 

The report comes with a bunch of figures and charts showing e.g. numbers of employees by stage, key challenges at a certain stage or competitive advantages. It comes to five essential findings:

  1. Don’t be afraid to change
  2. Seek out mentors
  3. Don’t look to investors for the day-to-day
  4. Get tech support
  5. Plan accordingly

To get the full report, go to startupgenome.cc or look at the infographic below! (I love infographics! ;-) )

Sources: gigaom.com, Kauffman.org

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Social Media: Big Gap between Consumers and Businesses

The IBM Institute of Business Value released a new study on Social CRM, the social evolution of traditional sales, marketing and customer service. They surveyed more than 1,000 consumers in the United States, Canada, the United Kingdom, France, Germany, India, China, Australia and Brazil about why they are using social media and would engage with a company or brand. In addition, they asked 350 executives worldwide about their view on consumers’ interaction with their company on Facebook, Twitter & co. The report published following the study, “From social media to Social CRM” (PDF), reveals some facts everyone could have guessed, but also one really interesting finding.

The survey shows that there is a huge perception gap between consumers and organizations about why people interact with companies on social networks. According to the businesses participating in the study the main reasons are, to learn about new products (73%), to get general information (71%), to submit opinion on current products (69%) or because they expect exclusive information (68%). The least likely reasons named by the companies are purchases and discounts (both 60%).

Here comes the surprise:

What companies expect to be the least likely motivation for consumers to engage with them on social sites, actually is their number one reason. 61% of the consumers connect with brands via social networks because they are interested in discounts and  55% for actual purchases. Their very last reason is to be part of a community (22%), what 61% of the executives expect.

Perception gap in social media

While this might be surprising news for many social media managers out there, it is actually good news for social commerce. Consumers don’t lose their purchasing interest on social media sites. They even expect companies to offer discounts and advantages. However, the gab between what consumers look for on company profiles in social media, and what companies think they actually want, is astonishing.

Jacob Morgan of  CMSWire calls it simple a lack of understanding each other: “It’s kind of like going to China and referring to people by their first names to be polite when the reality is that it’s rude to do so.“ Paul Greenberg (author of the book “CRM at the Speed of Light“) suggests that maybe the social media revolution mainly affects consumers communication, but not necessarily their expectations as a customer towards a brand. “The social customer is not just a social customer but a socially engaged person who is communicating differently now than they ever have been. That means we are in the midst of an irrevocable revolution, but not in business, in communication.

This study proves social media is not only about colorful images, real-time customer service and a trendy image. It is also about doing what business have always done: selling their products and services and granting special customers special offers and conditions – but on a new and very distinct marketing channel.

Source: mashable.fr (French), cmswire.com, ibm.com (PDF)

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