This infographic is inspired by the following quote from a serial entrepreneur and angel investor who I know personally. He published the following opinion:
Among the startup CEOs, there are ONLY two types worth investing in *(because you always back up the Leader, not just the product, or even the team!): 1. someone who did it (succeeded!) before and knows where he/she could have done better and is motivated to do much better, 2. someone who hasn’t done it yet, and is motivated to succeed or die trying. ANY OTHER KIND OF CEO IS A WASTE OF YOUR TERM SHEET.
The question here is, “What are the odds”? And, “What raises the odds?” As you can tell that odds are increase with the numbers of companies you start. Even then, before doing this research I would have thought that an IPO-ed startup CEO would have a more that 50% success rate with her next startup. But no, not so high.
What does this teach us? There are at least two ways to read this data. One – the pessimistic way – the odds are low. The other – the entrepreneurial way – even the veterans do not have a 100% tried-and-true strategy for startup success, so this puts me, a first-time entrepreneur on about the same level as the veteran.
Which way do you prefer?
Here is a question I have to those who really want to know the odds.
If the success rate of your first startup is 12%, your second 20% and your third 30% (assuming you took the second startup public – which is a VERY big assumption. Let’s make it to keep it simple.) – then how many startups does one need to startup to make their success rate over 50% – which means more likely to succeed than to fail?
Let me know how to solve this. Thank you.
- “90% of new products fail” The Startup Owner’s Manual: The Step-By-Step for Building a Great Company by Steve Blank, Bob Dorf
- “Entrepreneurs who have failed have a 20% success rate with their next venture“ 10 Burning Questions About Why Some Entrepreneurs Fail And Others Succeed by Alison Shontell