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10 key insights into the world’s start-ups

6. Management systems are key   WEF analysed 110 companies in different markets and found that those that implemented management processes outperformed those that didn’t.   Management processes are defined by WEF as something that “has a documented process and periodically and purposely executes on that process.”   Of the companies that implemented such processes […]
Emma Krieger

6. Management systems are key

 

WEF analysed 110 companies in different markets and found that those that implemented management processes outperformed those that didn’t.

 

Management processes are defined by WEF as something that “has a documented process and periodically and purposely executes on that process.”

 

Of the companies that implemented such processes early on, staff numbers quadrupled and revenues rose by nearly 500% in the first five years.

 

7. The US is the unrivalled VC king

 

Its economy may have tanked since 2008, but the venture capital market is alive and well in the US. While VCs in Europe retreated, investment into start-ups remained healthy in the US between 2008 and 2010.

 

In fact, it has grown; $US130 billion in private investment was made in 2007, rising to $US154 billion last year. Most of the money was ploughed into the IT and healthcare sectors, so if you’re starting an innovative business in this area, it could be worth jumping on a US-bound plane at some point.

 

8. Australian punches above its weight in tech

 

It’s official – Australian tech start-ups punch above their weight. Drawing upon Deloitte’s Technology Fast 50 Rankings, the WEF report shows that between 2002 and 2009, Australia has 207 companies represented in the top 50 at least once.

 

This figure is higher than that of Germany, Japan, China, India and marginally lower than France. Given that Australia has a population a tiny fraction of many of these countries, our performance in the tech space is something to be proud of.

 

9. There are common obstacles to growth

 

Common factors negatively impact businesses, according to the WEF research. Asked to name the key growth challenges to their businesses, 25% of bosses cite HR and people. A further 13% mention market opportunity and competitors, with 10% identifying company financing.

 

Operations, management, product issues, government regulation and marketing also made the top 10. If you manage to get on top of all of these issues, your business will be one of the few in the world without any barriers to growth.

 

10. Even successful entrepreneurs freak out

 

It may be comforting for budding entrepreneurs to read some of the comments made by top CEOs in the report. Moments of dark despair are common in the early stages of every business, even those that go on to become international success stories. Here are a select few quotes:

 

Natalya Kaspersky, co-founder and chairwomen of Kaspersky: “The early years were the real ‘dark years.’”

 

“We needed everything from an office to international business expertise. In addition to this, in 1998, Russia went through a major economic crisis.”

“Most of our customers focused on covering their basic needs rather than spending on other goods.”

“There was nearly no demand for our product and nearly no chance for a small IT company to survive.”

 

Sir Martin Sorrell, founder and CEO of WPP: “The period from 1990 to 1992 presented the biggest challenge. People would say we nearly went bankrupt.”

Mark Jung, co-founder, CEO and president of IGN Entertainment: “Laying off the majority of your employees, especially those that you have personally recruited, is not a task that I would wish on anyone.”

 

“I will never forget the words of an employee who said to me when I gave him layoff notification: ‘I’ve stuck with you through thick and thin, have always been a believer and in return, you shred me, and toss me into the street. Is this how you repay loyalty’?” Ouch.