What 30K Data Points Revealed About Why Certain Startups Reach Billion-Dollar Valuations

Ali Tamaseb, a founder turned venture capitalist and partner at DCVC, in his book Super Founders, has taken a data driven approach to identify and demystify traits that lead to startups reaching billion dollar valuations.

The approach:

Ali spent more than 4 years, collecting over 30,000 data points from 200+ startups that had reached billion-dollar valuations (i.e unicorn status). Ali in a recent Inc, article shared his approach:
I analyzed more than 65 factors per company: everything from a company's early competitors to the timing of its fundraising rounds to its founder's age and university ranking. No study is meaningful without a control group, so I also collected the same data on a similar-size group of randomly selected startups founded in the same time period (between 2005 and 2018) that didn't go on to billion-dollar valuations.
Video summary of the article:
What is key Super Power of Super Founders?

Based on the data collected, Ali concluded that, the key traits or super powers of billion-dollar startup founder are:
  • History of entrepreneurship, regardless of starting a company, a side gig or a project. 
  • Created value driven offerings, independent of size or success. 
The myths debunked:

Through his research, Ali also debunked a few myths, associated with founders.

1) Most founders of unicorns did not have experience in the same industry - Only 30% of tech startup and 40% of Enterprise/SaaS space had previously worked in industry. 

2) The vast majority of successful companies faced robust competition - 85% of startups had pre-existing competition and 50% were competing against incumbents. Companies with big competitors were more likely to become unicorns. 

3) Solo founders are not less likely to build billion-dollar startups - Ali found no correlation to success and the number of founders.
Takeaways:

Founders should focus on creating and capturing value. Start with the fundamentals of identifying a need (or a problem), run quick experiments to validate the idea, create Minimum viable products and then focus on scale.