Brokerage vs Fulfillment

A few weeks ago a marketing consultant named Tom Goodwin wrote the following opening line in a post called The Battle Is For The Customer Interface:

[In 2015] Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate.

The thing is, this isn't quite true.

What Makes A Startup Successful? 14 of the most interesting trends identified by the Startup Genome Report

Every once in a while an article comes along that is just so awesome you want to quote it in its entirety.  I haven't read through the methodology so take all these findings with a grain of salt.  The most interesting finding for me was that "balanced" teams (one technical founder and one business founder) significantly out-perform business-heavy and technical heavy teams.  To often I think technical founders question the value of a business co-founder, to their detriment.  Build it and they will come only works in the movies and exceptional cases.

The below is quoted directly from the TechCrunch article "What Makes A Startup Successful? Blackbox Report Aims To Map The Startup Genome"  the Startup Genome blog (it looks like TechCrunch ripped this off as their own):

• Founders that learn are more successful: Startups that have helpful mentors, track metrics effectively, and learn from startup thought leaders raise 7x more money and have 3.5x better user growth.
• Startups that pivot once or twice times raise 2.5x more money, have 3.6x better user growth, and are 52% less likely to scale prematurely than startups that pivot more than 2 times or not at all.
• Many investors invest 2-3x more capital than necessary in startups that haven’t reached problem solution fit yet. They also over-invest in solo founders and founding teams without technical cofounders despite indicators that show that these teams have a much lower probability of success.
• Investors who provide hands-on help have little or no effect on the company’s operational performance. But the right mentors significantly influence a company’s performance and ability to raise money. (However, this does not mean that investors don’t have a significant effect on valuations and M&A)
• Solo founders take 3.6x longer to reach scale stage compared to a founding team of 2 and they are 2.3x less likely to pivot.
• Business-heavy founding teams are 6.2x more likely to successfully scale with sales driven startups than with product centric startups.
• Technical-heavy founding teams are 3.3x more likely to successfully scale with product-centric startups with no network effects than with product-centric startups that have network effects.
• Balanced teams with one technical founder and one business founder raise 30% more money, have 2.9x more user growth and are 19% less likely to scale prematurely than technical or business-heavy founding teams.
• Most successful founders are driven by impact rather than experience or money.
• Founders overestimate the value of IP before product market fit by 255%.
• Startups need 2-3 times longer to validate their market than most founders expect. This underestimation creates the pressure to scale prematurely.
• Startups that haven’t raised money over-estimate their market size by 100x and often misinterpret their market as new.
• Premature scaling is the most common reason for startups to perform worse. They tend to lose the battle early on by getting ahead of themselves.
• B2C vs. B2B is not a meaningful segmentation of Internet startups anymore because the Internet has changed the rules of business. We found 4 different major groups of startups that all have very different behavior regarding customer acquisition, time, product, market and team.

The full report is available here.