- Startup
- Data
What Can Startup Data Tell You
In this Innosight:
What do we mean by a startup
A startup is a company that is in its early stages of operation. These businesses are often characterised by their innovative approach to creating new products or services, and they are typically focused on growth and development.
What is imporant is the innovative approach startups tend to have. So whether you call it startup scouting or innovation scouting, this article will most likely be useful to you.
Why is it important to understand startup data
Understanding startup data is important for several reasons. First, analysing data can help you understand the current state of the startup and identify areas for improvement. For example, you can use data to assess the startup’s financial health, track its growth, and measure its performance against competitors.
Second, analysing data can also help you make better decisions and develop strategies for the future when collaborating with startups. For example, you can use data to identify trends and opportunities in the market.
Third, analysing data can also help you build credibility and trust with investors, partners, and customers. By presenting data-driven insights and evidence of the startup’s performance and potential, you can demonstrate the viability and potential of the business.
Overall, analysing data is a critical part of working with startups. It helps you understand the current state of the market, make informed decisions, and build trust and credibility with key stakeholders.
How To Understand Startup Data
Focus On These 4 Areas
Team
Financials
Structure
Industry
Startup analytics: Where to begin
Startup analytics can be difficult. Different data metrics can help to understand a business better, and analysing startup data is no different. A well-done startup analysis makes it easier to discover emerging tech and innovation, and make informed decisions.
However, many times data tells more about the past instead of future success. Hence, the key to a successful startup analysis is to focus on the future outlooks with the right type of startup data.
How to determine which data to investigate further and how to assess the value of that data?
Start by examining the startup’s business model to understand how it plans to generate revenue and profit. Consider the products or services the company offers, its pricing strategy, and its distribution channels.
Below are the four main groups of startup data that we highly recommend analysing before moving forward with the chosen startup. These groups are built from the insights of our in-house research experts.
Team
What is the team like? Focus particularly on the founders.
The startup team analysis should comprise of a detailed analysis of the team, including team sentiment, member and founder experience and background, as well as team dynamics.
- Founders (amount of founders, age, past companies, expertise)
- Team members (expertise, industry knowledge & prior experience, entrepreneurial skills, product or service knowledge)
- Partners
- Advisers
- Team dynamics (passion for the startup, team sentiment, soft and hard skills, shared vision and strategy)
Financials
Don’t focus on the profit.
When analysing a startup’s financials, one should analyse the overall financial status, funding, investor profiles, and revenues.
Furthermore, take a look at the startup’s financial health to understand its current financial position and future prospects. Consider factors such as the company’s revenue and expenses, its cash flow, and its potential profitability (different from profit).
It is important to analyse the startup’s business model to understand how it plans to generate revenue and profit (in the future). Consider the products or services the company offers, its pricing strategy, and its distribution channels
- Overall business status
- Funding & investor profiles (funding frequency, investors' investment goals and their risk/reward ratio)
- Revenues (Look at the revenues rather than profit → If the startup is getting a lot of profit, they are probably not investing enough on the growth. Usually the best ones experience a lot of losses in the beginning.)
Structure
Evaluate the overall structure of the startup.
The startup structure analysis ought to cover areas such as core entities, organisational structure, employee trendlines, and organisational sentiment.
- Core entities & organisational structure (hierarchical vs. non-hierarchical, management structure)
- Employee trends
- Overall external organisational sentiment
Industry
Map the industry characteristics.
When analysing the industry a startup operates in, it is important to define the uniqueness of the industry, market saturation, size and growth potential, as well as its proneness to new technology and innovation.
Also, look at the startup’s target market to understand who the company is trying to reach. Consider the size of the market, the demographics of the target audience, and the competition within the market.
It’s important to assess the startup’s competition to understand how it compares to other companies in the industry. Consider the strengths and weaknesses of the competition, as well as any potential threats or opportunities.
- Uniqueness of the industry
- Market saturation, size & growth potential
- Is the market prone to innovation & new tech? (space industry e.g.)
Informed Decisions With Startup Analytics
Going through the four categories can help you gain a better overall perception of any startup. Startup analysis helps you identify emerging technology trends, innovation, industry trendlines, and any competitive advantages of the startups in your pipeline.
Analysing startup data with the framework presented in this Innosight ensures that you have a comprehensive understanding of the business model of any potential startups and new technology and innovation.
These are some useful tips for startup analysis in a nutshell. However, Innopipe could do all this work for you. What is more, it helps you to discover new startups and filter, sort, and rank them based on their performance in the four above areas. Furthermore, Innopipe enables you to categorise all of the startups in your pipeline according to their status – whether it is still in the shortlist stage, or whether you have discarded it previously.
Need help with this?
Whether you want to take the matter into your own hands or outsource everything, we got your back. See how Innopipe could help with your innovation scouting:
Catapult
Research
Innopipe
platform
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