Startups Exposed: The Anatomy of a Newborn Tech Company

Many people dream of starting their own companies, but what does the typical startup actually look like? Here’s a snapshot of how today’s startups form, grow and behave.

See the infographic below, and scroll down further for a full explanation:

anatomy-of-newborn-tech-company

1. Who are they?

  • The average startup now consists of one to two people. Fact: only about 20% of current startups have more than 2 people.
  • Over  85% support their startup from savings and/or consulting work.

2. What are they spending?

  • The majority spends less than $170 on hardware each month. Why: many startups develop mobile apps without expensive hardware.
  • In fact, most only spend between $80-$500 per month total. On what: coffee, meetings, industry events, travel costs, recurring bills.

3. How old are they?

  • 45% of startups will last just 6 months before closing their doors (Jan->Feb->Mar->Apr->May->Jun->Aug->Sep/Oct-Nov-Dec).
  • But if they can make it to 9 months, they will likely survive their first year.

4. What they are doing?

  • About 32% are currently working on their prototype.
  • Another 30% are ready to start selling their product.
  • And about 28% are either pitching their prototype or reworking it after pitching. Note: pitching refers to trying to sell an initial build to customers or investors. many require reworking as a result.

5. Who will break even?

  • When it comes to breaking even, most founders guess they’ll achieve it in 3-12 months. Note: roughly 22% said they couldn’t accurately guess at this time.
  • But in reality, only 10% have yet broke even, and only 10%, more are sure to break even in the next 3 months.

6. What problems are they facing?

  • While specific problems are unique to each business, their setbacks fell roughly into 3 categories
    • 50% face problems with development
    • 20% find their hang-ups in sales and marketing
    • 30% are struggling with time issues.