business possesses opportunities however startups are exposed to high risks. In
order to succeed, startup company should be unique or possess the potential to
stand out, among a large number of other companies in the same type of business.
Now days, in order to succeed, many factors are contributing to the success and
growth including web-traffic, social media, networking, marketing campaigns,
employees, funding etc.
is based on the report provided by Forbes about the Top 100 (data) Analytics
Start-ups of 2015, for the companies that develop and sell analytical software
through the B2B model, which was produced by the Mattermark, a research firm providing
data about the venture capital companies.
Define which startups are the best to track and potentially
Explain the results and provide the conclusion.
of data displaying all available variables, for the whole population of 100 companies,
specifically names, growth score, stage, total funding and location for all 100
companies subjected, through categories, source of data and the date is
detailed within Table 1.
of data displaying variables for the top 10 companies, sorted by the variable
“Total funding” is displayed through the Table 2, in descending order.
49% of the top 100 companies are
situated in the Bay Area, 11% in New York and 10% in Boston while remaining 30%
of the companies are distributed through other locations, as per the Table …….
As we can
see from this table the most
part of companies is situated in the Bay Area. That is because there are a lot
of advantages in this area for creating a startup. Bay Area is a part of San Francisco. San
Francisco is the most attractive ecosystem in the world. You can find something
for every stage your company is in.
starts with great accelerators like YCombinator, 500 Startups and Alchemist.
They connect you to San Francisco’s best advisors, angel Investors and VCs who
attend the Demo Days of the named programs above where startups pitch their
business plan, month-over-month growth, etc.
it is easier to get funded in Bay Area than elsewhere because of the proximity
to VCs like Andreessen-Horowitz, Social+Capital or SV Angel. The people
involved in these investment firms have decades of experience in building great
startups and contribute to San Francisco’s maturity which other startup hubs
around the world are still searching for. The SF Bay Area invests a lot of
money into startups.
density of potential M&A opportunities from BigCos is higher which creates
a certain buzz around coming here.
Finally, the media coverage of rocketship startups like Uber, Slack, Dropbox or
Airbnb can be very inspirational and push you to new height and to achieving
amazing things. Also people are just so open to new ideas and
ventures, versus other parts of the world in Bay Area.
the increasing prevalence of tech hubs across the country, the Bay Area still
takes the cake in one area—density. Nowhere else can you find such a concentration
of high-quality talent, founders, and investors.
to the Wall Street Journal (https://www.wsj.com/articles/SB10001424052702303807404577434281019286006?mod=googlenews_wsj),
San Francisco now boasts more than 94,000 people employed in tech, a 10 percent
increase from last few years.
So, there are advantages and disadvantages of creating a
startup in San Francisco/Bay Area.
High cost of living –
life in Bay Area are expensive: rents are high; products are cost more money
than in any other areas of the USA. Despite the high cost of living also there
are potential earnings are higher.
High competition – high
competition for funding, high competition for customers and high competitions
for talent. In Bay Area are situated heavy-weight companies like Facebook,
Google and Amazon, so the competition for top talent is really very high
because early-stage companies cannot compete in terms of salary and brand name;
also, you have to have really an unique and innovative product to attract
Really high office rents
– because of the nearness of Silicon Valley the office rent increased through
the roof (for example, the price per square foot for office in 2015
High salaries – to hire
a top talent in Bay Area is too expensive (you have to spend around $100 000.00
per year for a mid-career employees).
Less loyalty – people
are generally more loyal toward those they have existing relationships with,
but same loyalty is somewhat less prominent when it comes to maintaining employees
(prioritizing employee satisfaction and treating culture) – double standards.
Bad Time zone – Nine-hour time difference from Bay Area to Western
1) Large Talent Pool – there a lot of product-driven engineers,
tech professional and web designers with the best country’s schools nearby.
Annually these schools produced a lot of fresh bunches of talents.
2) Active Tech Community – no one does networking like does Bay
Area, there are a lot of meetings, educational seminars, networking events and
etc. Also there is a Silicon Valley’s Tech Community.
3) Access to capital – Bay Area and Silicon Valley are home for
many investors who are interested in tech, so there are a lot of prominent
venture capital firms, incubators and etc.
4) Faster Progress – there are a lot of resources in Bay Area,
which could be useful for a startup.
New York City has long been known as a hub for finance,
ecommerce, and health care startups.
But recent years have seen a rise in another breed of
startups tackling issues ranging from crime to housing, sports to beauty.
There is no such accessible tech platform and resources in
the New York City for the startups and there are also very few industries in
which you can make your startup.
It is a
motherland of such companies as Facebook and Dropbox. There are top
universities as Harvard and MIT and there is one of the highest rates of
venture capital investment in tech companies.
In Boston produced some good
hardware and security software companies, but there just haven’t been a lot of
consumer (focused companies).
Most of the apps for phones were
developed in California (where is Bay Area). It’s a hugely powerful ecosystem,
and that doesn’t exist in Boston. So that is why Most of startups are in Bay
ii) Funding (to fix a histogram)
Total funding of the top 100 companies amount to US$7.012.80
billion out of which …..% is in ……, % …… in ……., % ….. in …… and the remaining
……………….. distributed through other locations, as per the Table ….
For better understanding of the results, we have calculated
the Average (mean) of the total funding, of the top 100 companies, which amounts
to US$70.13 million (“70.13”), while the median of the total funding is US$35.95
million (“35.95”) with standard deviation US$14.97 million (“14.97”) from the
Further to the above, it should be noted that the skewness
is rightward or positive since the mean (70.13) is higher than the median
(35.95), Table …….. specifically, the average of total funding is higher than
the median (middle) of total funding meaning that there are companies, within
the top 100, which are outside the range. The outcome of the extreme results
are displayed though the whiskers on the Box Plot, as per the Table …..
7 out of 10 top startups are located in the Bay Area, 2 in Salt
Lake City and 1 in New York, as displayed through the Table …..