![[99%Tech]](https://substackcdn.com/image/fetch/w_36,h_36,c_fill,f_webp,q_auto:good,fl_progressive:steep,g_auto/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fd228f418-9a3f-40c0-a162-b106f1626736_1024x1024.png)
What does it take to become a unicorn founder? Insights from 200 startup journeys
The future of innovation is global. We discuss it here.
Is there a proven road to become a unicorn founder? What does it take to scale a startup, and is it different by market?
One of the most interesting pieces of research in the field recently came out by Endeavor, which charted the journeys of unicorn founders in the U.S., China and Emerging Markets, leveraging their rich global dataset.
What they found in some cases confirmed what I already knew or assumed and in other ways challenged me.
A few highlights that stood out for me:
Global citizens: the best, particularly emerging market founders leveraged multiple global experiences
Elite markers mattered less than is publicized: only 1/3 of founders graduated from an elite university and 20% at an elite employer
What did matter was startup experience at incredible fast growing startups. 50% had previous startup/scale-up experience. Remarkably, 50% were serial entrepreneurs. The average had 10 years experience
In my book I called them creators, but emerging market founders solve real mass market problems
Without further adieu, the below are excerpts from the Behind The Scenes and the Original Endeavor Report published here and here.
The Endeavor Insight team was thrilled to share our latest study on the career journeys of 200 top unicorn founders. Now that it’s published, we wanted to give everyone a behind-the-scenes look at how we developed it.
No Single Road to Success
Endeavor has worked for more than 25 years to help founders in emerging markets scale up, and many of them have achieved unicorn status. We’ve seen how their life stories and career backgrounds vary from one another, and from what people might assume from the resumes of Silicon Valley founders. We came up with the Unicorn Founders Pathways project so we could better understand these journeys and see who was taking the “road less traveled” yet still reaching the same levels of success.
There are a lot of studies on entrepreneurship that focus on company-level data or aggregate industry trends. These approaches are helpful, but it’s difficult to uncover insights on high-growth founders without going directly to the source, which is why we decided to use founder-level data in our research.
When it comes to assessing high-growth founders, common industry conversations also focus on a “recipe” for success. Investors are always looking for the special ingredient that will help them weed out potential investees. In answer to that, several other studies have searched for groups of founders that went to a certain school or have a specific characteristic. But we wanted to better understand what experiences really matter and take a closer look at the real steps founders take.
For instance, when we dug into our data, very few unicorn founders attended any given university or worked at any specific company. When put together, founders who attended Ivy Leagues and other top-ranked schools only made up one third of our sample. Most founders attended other types of universities, with hardly any concentration or commonality among them.
So where do unicorn founders come from?
Their research found over 200 pathways to become a unicorn founder.
The below is an excerpt from the report highlighting some of the key similarities between founders.
Unicorn founders are global citizens. Fifty-five percent of the top US unicorn founders are immigrants or second-generation immigrants, and the top countries of origin for these entrepreneurs are India, Israel, China, Ukraine, Canada and Russia. Entrepreneurial migration is a common phenomenon for emerging markets too. Thirty-two percent of the top unicorn founders in emerging markets are immigrants or second-generation immigrants. Many of these are examples of South-South migration, like a founder moving across countries in Latin America. Founders also develop a global perspective by studying or working abroad. Sixty percent of the founders included in this research studied or worked abroad, gaining valuable networks and knowledge.
Only one third of top unicorn founders completed their bachelor’s degree at an elite university. Elite institutions are not as common among unicorn founders as you might think. Nearly all (97 percent) of the 200 top founders we researched obtained a college diploma, but only one third of them received a bachelor’s degree from a top-ranked university. If we add in master’s programs and PhDs, a little less than half of the founders completed study at such an institution.
Only 20 percent of unicorn founders worked for an elite employer. Work experience at elite employers including Big Three consulting firms, MAMAA tech companies, and bulge bracket investment banks was rare among this cohort of entrepreneurs.
Half of these founders previously worked at a startup or scaleup. Most of the world’s successful unicorn founders did not have experience working for name-brand employers. Usually, they worked for an entrepreneurial company prior to launching their unicorn company. Many of these founders served as C-suite executives of tech startups, or grew from within the ranks as that entrepreneurial company went from startup to scaleup. A significant number of those employers were unicorn companies themselves. In most cases, the entrepreneurial employer had a successful exit, either by going public or being acquired. Aspiring founders who work for companies that have an exit like this gain invaluable first-hand experience.
About half of these founders are serial entrepreneurs. Previously founding a company may be a good resume builder for would-be unicorns. About 49 percent started a business prior to launching their unicorn company. On top of that, a majority of these serial entrepreneurs had successfully exited.
The average founder had 10 years of work experience. There are no shortcuts on the pathway to building a unicorn company. The unicorn founders included in this study gained a decade of experience following their undergraduate education, on average. Several existing studies have shown that the quintessential successful founder is not particularly young or a college dropout. Endeavor’s research builds on these findings, showcasing that successful founders usually gain entrepreneurial experience and build networks over time.
Science and engineering training is far more common than business. Sixty-one percent of founders majored in a science or engineering field in undergrad, compared to only 19 percent who majored in business. Computer science, electrical engineering, and mathematics were popular majors among those with science or engineering degrees. Science and engineering graduate degrees outpaced MBAs among those who continued to study, and for the 10 percent of founders who completed a PhD, most chose computer science.
Founders in emerging markets have different skill sets than their US counterparts, and reach unicorn status faster. Emerging market founders were ten times more likely than US founders to have previously worked in finance, consulting, business development, or marketing. On the other hand, US founders were more likely to have worked in product and engineering roles. Another difference between the emerging market and US founders is how fast they grow their companies. Founders in emerging markets achieved unicorn status for their companies in an average of five and a half years, while US founders took more than six years.
Emerging market unicorns are more often solving real problems at scale, compared to US unicorns that tend to follow VC fads. There were high concentrations of fintech, e-commerce, and logistics/transportation companies among the emerging market unicorns. In contrast, US unicorn founders tend to operate companies in various high-tech sectors, including those arising from recent VC-driven fads such as blockchain and cryptocurrency. Emerging market unicorns tend to create a more widespread impact by improving the daily lives of millions in areas such as financial inclusion, ride sharing, and super apps. These companies include Clip, Careem, and Rappi. Their founders’ pathways demonstrate many of the findings above.
Read the rest of the report here.
Interesting. My thesis at @signalrank is that there are zero strong signals associated with founders if one is looking at correlation to outcomes.
Our algorithms focus in scoring funding rounds by leveraging other signals.