Trends of Successful Technology Startups


3

What are trends or patterns of successful technology startups? Which is the sector where startups have been more successful? I see social networking as one, ex. Facebook.

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asked Oct 25 '09 at 15:22
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Rachel
173 points

9 Answers


2

Check out the book "Crossing The Chasm " for identifying the patterns of a successful startup, I had also previously posted something similar.

There is also a discussion in the context of social networks and the successful patterns.

Startups generally has been very successful in markets where the solution they offer can -

  1. Scale rapidly
  2. Service more customers with fractional increase in resources
  3. Does something not able to be done before
  4. Connects people together
  5. Charge a subscription fee or a per-use fee that's repeated every month

Facebook is the latest incarnation of services to "connect everyone together" efficiently (and make the process fun).

Companies that have successfully done so had grown very fast in the past - e.g. Skype, Nokia (Connecting people was their slogan).

The general observation of why such a value exist is Metcalfe's Law, which states that "the value of a telecommunications network is proportional to the square of the number of connected users of the system (n2) "

While back in telecommunications world - the "user generated content" was conversation, in the current paradigm, its status updates, photos, tags, links, textual conversation, twitter updates, game achievements, etc.

If such a pace of sharing continues, you can sure to expect that more aspects would be shareable in the near future (and probably wonder about what cannot be shared).

answered Apr 14 '10 at 01:49
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Alex Lam
699 points

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If your question is about "technology" sector in general, as opposed to specifically software startups, then without a doubt Biotech has been the most successful. Biotech and health care are still a growing market and the economy, while it's had some impact, has had less of an impact there than in other areas due to the real demand and government actions.

If you're asking specifically about software, there is evidence to show that software in healthcare is also more successful than average. The same is true of education software. See some data here from Professor Scott Shane: http://boss.blogs.nytimes.com/2009/10/12/which-industries-are-most-favorable-to-start-ups/ about startup failure rates. It's the inverse of your question, in a way, but it indicates what sectors are more likely to have startups that don't fail.

Scott Shane of Case Western Reserve University here in Ohio is an internationally recognized researcher on entrepreneurship. I recommend you check out his work if you're interested in hard data on this. http://wsomfaculty.cwru.edu/shane/ Please note that he does not focus on tech or software specifically, though, but rather on new business ventures in general. This may or not be of use in your individual case.

Best of luck!

answered Oct 28 '09 at 02:43
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Mark Beadles
502 points

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This question also depends on your geographic location.

In the far east and south Asia you are seeing Mobility startups doing really well these days as mobile adoption is growing at a rapid pace.

In the US social media is definitely a space which is very hot but I don't see as many companies being able to monetize their services effectively.

One of the hotter spaces is definitely iPhone and mobile apps leveraging off their app stores.

The holistic trend line seems to be leveraging off existing platforms which have an exponentially growing base.

answered Oct 26 '09 at 00:57
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Usman Sheikh
1,728 points

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Google "augmented reality" and/or "web squared" :)

answered Oct 25 '09 at 17:42
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User287
164 points

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  1. Market. Even the best surfer needs a good wave.
  2. Uniqueness. An approach, technology, service, or know-how that provides a competitive advantage.
  3. Ambitious & focused team.

This is a great talk by Don Valentine, Sequoia: http://www.youtube.com/watch?v=nKN-abRJMEw

answered Feb 27 '11 at 00:32
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Burritoboy
431 points

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Rather than try to jump on a bandwagon or hit a moving target you are better off choosing something you are interested in or passionate about. Just trying to go where the money is makes you a follower - and that is not a good start for starting a company in my opinion.

There really is no delineation - people see needs or have ideas of things they want for themselves and then develop for it.

Find a "pain point" and fill it.

answered Oct 29 '09 at 00:57
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Tim J
8,346 points

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That depends on how you want to define Successful, and what timeframe you are interested in.

For example, Twitter may be considered successful, but it is doubtful to me that they will ever be profitable.

Google had an advantage of starting when there was more money available for startups, during the tech bubble, so their challenges were substantially different than now, IMO.

answered Oct 25 '09 at 23:13
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James Black
2,642 points
  • If Twitter won't be profitable, why do VC gave them money? Only for fun? – Jpartogi 9 years ago
  • There is the hope that they will be profitable, but will people be willing to pay for a premium service, since you can't make money off of advertising. – James Black 9 years ago
  • "since you can't make money off of advertising" Why do you think so?? How Google earn their money? – Krasimir Evtimov 9 years ago
  • Google is large enough and the main destination on the Internet. If you are a major destination then you can make money off of advertising. – James Black 9 years ago
  • I've read Twitter is profitable now that Google and Microsoft are paying them for their real time data, for whatever that's worth. – Matt 9 years ago
  • @Matt - I would be interested in knowing how they define profitable, but if Google and MS are giving them a great deal of money it would be interesting to see how they will use that. Perhaps they will send ads based on your past history and current location, as tweets. – James Black 9 years ago

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I think the "trend" in successful startups is that they are smart enough to understand the markets they're in, identify where that market is going, size up the opportunity, determine how to monetize the opportunity with a product or service that delivers value, and get there before the competition.

answered Oct 26 '09 at 03:36
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Chris
4,214 points

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To answer your general question:

Most successful start-ups have failed at
something first.

Twitter with Odeo for example. Or in Google's case they release early and interate until it's correct.
answered Oct 29 '09 at 03:20
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Jon Hadley
161 points

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