There are headlines about startups, success stories, amazing tales, everywhere you look. But often when you examine some of the stats, they paint a slightly different picture. Because it’s easy to think that you’re in the wrong region, or you’re the wrong age, or that you’re focusing on the wrong aspects of your business.
When in fact you are actually on the right track.
So let’s look at four key stats and examine what they mean for you when you’re getting ready to make that jump into the world of the entrepreneur. Are you doing right by the stats? Or are your plans in need of some adjustment?
These are the stats:
- UAE secured USD 418m in investments
- 81% entrepreneurs put growth before profitability
- 77% of startups initially rely on personal savings
- Average age of a startup founder is 45
In 2019, UAE startups secured USD 418m in investments
The Venture Investment Report from Magnitt notes that in 2019 there were more investors than ever before in UAE-based startups – with a large portion of those investors coming from outside the region. In the top 10 MENA countries by total funding, we find the UAE coming in first with USD 418m in total funding, then Egypt with USD 95m, then Saudi Arabia with USD 67m.
But it’s good news for the MENA region as a whole, gaining a total number of investments of 564 with a worth of USD 704m in total funding.
The optimism in the region for startups is clear. In one report, over 64% of respondents in the MENA region said they wanted to start their own company, with an even higher number having taken the first steps towards establishing their own business over the past five years.
Clearly, this is great news for anyone looking to start a new company. Startups are becoming more and more common in the region, and particularly in the UAE where on-going government initiatives add further encouragement and assistance. So when the new startup founder is considering where to set up, the UAE continues to be the first choice in the MENA region.
The stats back this up. Popular regional locations for headquarters include Dubai, Cairo and Riyadh. Dubai came in first (27% of respondents) with Cairo next at 23%, with Riyadh taking 11%. When it comes to sectors, the report noted that e-commerce, consumer services and financial tech solutions were the most popular.
The majority of startups focus on growth over profitability
This should come as some comfort for the new startup owner who is concerned about if and when they will make a profit. It goes without saying that in order to be viable, there must be a path to profit embedded in the business plan. But should that always be the primary focus?
One report noted that 81% of respondents were more interested in growth compared to making profits.
Growth is the key to profit over the long term. So it’s a balance in terms of what should take your attention. When looking at your company, it’s worth keeping the above-mentioned stat in mind – that growing your business, if done well, can ultimately be a more effective route to profit. Rather than making strategic decisions based on profit alone.
77% of startups rely on personal savings for their initial funds
This stat from the US demonstrates how common it is for entrepreneurs to rely on their own funds when starting their companies. More than that, there’s actually been an increase of around 4% in the usage of personal funds over the last 15 or so years.
What’s so important about this stat is that it reminds us that while getting venture capital can certainly turbo boost a business, and make some headlines, if you focus on that at the expense of everything else, it can slow you down and take away your focus.
Because the media loves the success stories of these huge investments – and who doesn’t? – it sometimes gets in the way of the fact that most businesses start with their own money and continue that way for a long time.
The tradition of bootstrapping your business is a long one, and this route also has more than its fair share of success stories. Important to remember, then, that starting out modestly with your own money, even working from home, does not mean you’re not destined for success.
Relying on your personal savings for the early part of your startup’s life is not just common, but can become a great route to success.
Average age of a startup founder is 45
While we tend to read a lot about the twenty-something founders of successful startups, the stats paint a different picture. While there are some college-aged founders who do become incredibly rich and successful, the average age of a startup founder is 45.
So if you are no longer in your 20s or 30s you should take some comfort from this. In fact, one study found that 60 year-olds were actually three times more likely to succeed than someone half their age.
So experience here is clearly playing a major role. More than that, it’s worth remembering if you’re currently feeling ‘stuck’ working in a job that you don’t like and feel that perhaps the chance to be an entrepreneur has passed you by – it hasn’t.
Experience brings better strategic thinking and a deeper understanding of what makes a business work – as well as knowing many of the pitfalls. The stats back this up – entrepreneurs who have at least three years of specific industry work experience are 85% more likely to find success when launching their startup.
Living the stats
As these stats have shown, when you’re looking to start a company it’s important to go behind the headlines. In doing so, you find out that much of what we read, while true, isn’t giving a full picture. And in fact you might be far better placed that you first think, when it comes to launching your startup.