Blackbox Introduces the Startup Genome Compass to combat the massive failure rate of startups.
SAN FRANCISCO, Calif. - Aug 29, 2011
Three months ago Blackbox released the Startup Genome Report. Now they're releasing their newest creation to reduce the failure rate of entrepreneurs around the world. "90% of all startups fail. The most common reason for failure is premature scaling. In our dataset of 3200 startups about 70% scaled prematurely," say the authors of the Startup Genome Report. Three months ago blackbox released the first Startup Genome Report and it went viral throughout the startup ecosystem. To date it's been covered in more than 150 publications in more than 15 languages, and the report has been downloaded more than 15,000 times. The report was a 67-page in depth analysis on what makes startups successful, created in collaboration with researchers from Stanford and Berkeley. As the first work of its kind it has enjoyed enormous success. But since we're living an era pervaded by Internet Startups the authors of the Startup Genome Report decided it was not enough have a static report, the next step was to electrify their research and turn it into a web app. Today they are releasing the Startup Compass to help entrepreneurs with this widespread problem of prematurely scaling. The tool helps diagnose startups for premature scaling by mapping the startups' progress along 5 core interdependent dimensions: Customers, Product, Team, Business Model and Financials and finds any inconsistencies. The authors Max Marmer and Bjoern Herrmann further explain that, "in a startup many of these dimensions are highly uncertain, in many cases, all of them. The art of high growth entrepreneurship is to master the chaos of getting each of these 5 dimensions to move in time and concert with one another. Most startup failures can be explained by one or more of these dimensions falling out of tune with the others." The Startup Compass gives entrepreneurs a dashboard where they can monitor their progress along these dimensions, helping them to set better priorities on a monthly basis. The tool also automatically diagnoses a startup's type according to the Startup Genome's Typology (Automator, Social Transformer, Integrator or Challenger) and by Stage (Discovery, Validation, Efficiency and Scale). It then benchmarks them against startups in the same type and stage across more than 25 key performance indicators and highlights relevant research from the Startup Genome Report. The product has been tested with a number of VCs and Accelerators from around the globe and they've found it to be a very valuable communication to stay on top of how they're startups are progressing.
If you're interested in reporting on the findings, we'd be more than happy to answer any questions you might have via email/phone. You can reach us at StartupGenome@blackbox.vc.