

Only 200 Startups Per Year End Up Mattering and Most of them Aren't in Tech - smit
http://bostinno.streetwise.co/2013/05/14/only-200-startups-per-year-end-up-mattering-most-of-them-arent-in-tech/

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acjohnson55
I think there's a bit too much obsession with astronomical growth. There's got
to be something to be said for a company that produces dependable profit,
living within its means. Not every enterprise needs to be massive.

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freyr
"...where matter is defined as the company (relatively) promptly going from
founding to $100 million in revenues."

If I can found a company that provides financial security to myself and one or
more employees, that matters... at least to me. $100 million in revenues is
great, but it doesn't necessarily matter to me.

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mcintyre1994
I think they should at least use profits. It's not everything - Instagram sure
mattered, but it's a lot more robust than revenues. A hypothetical company
that doubles your money could probably meet that revenue limit, but they
wouldn't really matter long term.

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josefresco
$100 million in revenue looks awesome until you see $101 million in costs or
losses. What about profitability?

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kcorbitt
This is a great point. Even if absolute revenue is lower, companies that deal
mostly with information, rather than physical stuff, tend to have much, much
higher return on investment when compared with capital-intensive alternatives
like manufacturing or retail. This may matter to VCs a great deal.

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paul
It would be nice to see the list of 200 companies. A lot of detail gets lost
in those graphs.

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fpp
Fully with you - without that it's just charts (with hard-to-tell-apart
colors).

Particularly as this is based on Inc.'s 500 list(s) - had a look at something
similar a few years ago based on these lists - according to their data the
fastest growing companies at that time (4-5 years ago) where all Human
Resources / Head-hunter start-ups.

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minimax
It's not based on the Inc 500. It says it's based on data from Bloomberg and
Capital IQ, which is probably why he isn't releasing it.

I tried Googling around for a free stock screener that would let you filter by
revenue and founding year but I couldn't find anything. It wouldn't get you
the private companies but it would probably be a representative sample of the
whole group.

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sharemywin
My definition of a company thta matters: Assuming aboout 3-5x earnings for a
sale price for most small companies. If I wanted to retire on about $70,000/yr
and the market returns about 6% I'd need $1.2 million in earnings assuming 10%
profit that's about $12 million in revenue for 4 years which is $3 million in
sales.

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wtvanhest
A lot of "tech" companies are in those two sectors.

Amazon is consumer discretionary for example. I don't have a list of holdings
per sector in front of me right now, but a bunch of stuff you wouldn't expect
is in consumer discretionary.

Most industrial companies have technical competitive advantages.

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pionar
"Yes, the American Southeast, the powerhouse of economic growth, apparently.
At least by this measure."

Well, duh. It shouldn't be that astounding. The Southeast has for a long time
been a "powerhouse of economic growth", because, as much as we don't like to
admit it, the US is still a highly manufacturing-reliant economy. And where is
the biggest manufacturing region (especially in new development)? The
Southeast.

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mindcrime
Good point. It's interesting to note that there's a specific named region of
the overall southeast, known as the "I-85 Corridor"[1] where a lot of economic
activity is centered.

That said, there's a lot more to the Southeast than manufacturing. NC, at
least, has a vibrant tech-startup scene, particularly in the Triangle (Raleigh
/ Durham / Chapel Hill) region. And, as the Wikipedia page notes, Charlotte is
quite the banking / finance hub these days.

This area also largely overlaps with what is known as the Piedmont Atlantic
Megaregion[2] which is acknowledged as an emerging area of substantial
economic growth.

IOW, "this ain't your father's Southeast".

[1]: <http://en.wikipedia.org/wiki/I-85_Corridor>

[2]: <http://en.wikipedia.org/wiki/Piedmont_Atlantic_MegaRegion>

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calinet6
"One more bit of data from this study for Boston folks: when Kedrosky looked
at the incidence of high growth IT firms by state, taking into account GDP and
other factors, Massachusetts came out ahead. In other words, it was the state
that had more than would be expected based on its population and economy."

Awesome. Go Boston.

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intellegacy
Boston is an underrated startup scene. I've only been getting involved
recently and it's amazing how many quality tech businesses don't make it to
HN, especially ones out of MIT or ones started by older professionals (often
with phds, etc)

They don't make it to techcrunch but they have really, really smart people
working for them and are tackling wicked hahd problems.

BTW tried to follow you on twitter but blocked? haha. no offense taken just
wondering why

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calinet6
Very sorry about that! I probably misread it as a spam bot (no offense either,
I get like 4-5 per week and it's hard to parse them). I've unblocked and
followed you, and I'll read more carefully next time :)

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intellegacy
No worries! I block spam accounts too, haha. I saw an account that had tweets
that sounded a bit off. After reading them carefully, I realized they were
most likely fake 'real' tweets. Incredible what the spammers are doing these
days.

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tedsuo
I wonder how many of these new companies come from large companies that are
just rearranging themselves? So that first year's revenue is based on pre-
existing revenue or assets?

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espadagroup
I'd be interested to know how many companies were started in each of those
sectors and be able to see the "success" rate rather than just the absolute
numbers.

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napoleond
It's actually kind of surprising to me that as many as 200 companies founded
in any year will go on to reach $100 million in annual revenue. I suppose it
shouldn't be--I wonder how many new companies are founded each year?

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orangethirty
I currently work with a company that is simply blowing up. A startup in the
automotive industry. It uses software to provide its main product/service, but
I wouldn't call it a tech company. Last year it made a couple of millions in
profits. The current year is going to be at least 5X that thanks to some new
systems I'm putting in place. Did I mention its privately owned, and in the
middle of nowhere? Did I also mentioned it is owned by someone who does not
know much about computers? At this rate, it will corner the market it caters
to in one or two years. All while running under the radar.

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_sentient
It's an interesting article, but this title is ridiculous. The notion that a
startup doesn't "matter" unless it does $100M+ in yearly revenue is just plain
wrong.

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wfrick
The "matter" framing is borrowed from the paper, which has a nuanced defense
of the criteria
[http://www.kauffman.org/uploadedFiles/DownLoadableResources/...](http://www.kauffman.org/uploadedFiles/DownLoadableResources/companies-
that-matter.pdf)

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alizaki
A lot more tech companies are started now than maybe, 3 years ago. Also, it
takes companies time to reach $100M in revenue.

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mikeryan
Hmm Summly may not make a massive dent in the US economy. But it mattered to
some folks.

There' may be hundreds if not thousands of tech startups which don't "matter"
because they end up as failing, an acqui-hire or minor exit. But in sum each
of those startups have created jobs, paid taxes and added something to the
economy.

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kpennell
Please post the list if you find it, thanks!

