This article is written by Jeremiah Uke, a Contributor Author at Startup Istanbul.
Hans Van Grieken is the EMEA (Europe, the Middle East, and Africa) Technology Research & Insights Leader within Deloitte’s global CIO
As a consulting firm, Deloitte invests into understanding what startups do, they find the real facts and data relevant to startup growth. In 2015, Deloitte researched 400,000 startups from 24 countries, they found out that only one out of every 200 startups become scaleups ($10 million within 5 years). One of the questions that the research tries to answer is “which market should you try?”, because not all markets are equal, some industries are more equal than others, industries such as Utilities, mining, oil and gas extraction, agriculture and forestry have survival rates of 50% and higher. While industries like manufacturing, information, wholesale trade, retail trade, finance, insurance, administration and support have survival rates lower than 50%. Some of the things notable about scale-ups is:
- Most of them are led by experienced entrepreneurs in their late thirties or early forties.
- More than half of scale-ups were founded by teams.
- Timing is everything: market entry is twice as long for scale-ups as it is for start-ups
- Only 25% of start-ups are designed to scale.
It is important to understand that teams perform better, therefore, you should find your counter-balancing partner that makes up for talents you don’t have. Make sure you have a platform that will allow you to launch your scale-up when the timing is right, always do this before you launch. Finally, try and understand what the world would look like when you are a $10 million+ company.
If you are a 10 million+ company, you should ask “what actually should I consider?”, because you cannot run a $10 million revenue company as if it is a startup, you need to learn. Deloitte has worked with MIT Sloan for 6 years to try to establish Digital Maturity, they do this by asking $10 million companies the question “in your market, imagine the ideal digital company that might not be in existence yet, and rate yourself towards that ideal on a scale of 1-10?”. This classifies these companies to three categories; early, developing, and maturing. 34% fell into the early category, 41% were in the developing category, while the rest 25% were in the maturing category.
In the Dutch market, they interviewed 11 big customers of Deloitte trying to understand what they are doing and how they are interfacing with startups, finding out if they have an investment fund and the type of processes the startups have to engage in. They also looked at the types of scaling problems $10 million+ ask. Deloitte used the data to identify the DNA of digitally enabled organizations, 13 DNA strengths were identified and they are:
- Talent drive
- Long-term thinking
- Digital leadership
- Digital Maturity
- People Development
- Leadership drive
- Experimentation and