Alice in Wonderland asked the Cheshire Cat which way she should go. Cheshire replied, “That depends very much on where you want to go. If you don’t know where you want to go, it doesn’t matter which way you go”. Entrepreneurship is exciting and stressful. To be an entrepreneur is to follow untrodden paths, or to create new ones.
We are living in a unique era for entrepreneurship. An era in which there is more money than ideas and more ideas than entrepreneurs.
It is an era in which discipline, perseverance and sacrifice, not just funding, are needed to bring the idea to life.
Entrepreneurship is an attitude. A mindset. A way of life.
An entrepreneur is a person who wants to be part of the solution, not part of the problem.
“If we tried to think of a good idea, we wouldn’t have been able to think of a good idea. You just have to find the solution to a problem in your own life”, Brian Chesky, co-founder of Airbnb, quoted in the best seller “TOTEM”.
Whether in agriculture, retail, entertainment, manufacturing or the service sector, they are people who find fulfilment by taking risks, many doing what they love, and those who solve pain and improve people’s lives by embracing success.
A few become disruptors in established industries.
“As soon as you stop dreaming big dreams, you become an old company”.
I love this quote from Melanie Perkins, Founder of Canva. She was right to dream big and then had the strength to bring her dream and idea to reality. She also had the vision to “build the most valuable company in the world”. Today, Canva is valued at over $26 billion.
Never has a startup founded and run by a woman, worldwide, been worth so much.
According to the map of entrepreneurship* startups in Spain:
1.-The average life of startups. Spanish startups now have an average life of 3 years, with a positive evolution compared to previous years (2.7 years of average life in 2021, 2.5 in 2020 and 2.2 in 2019).
This is slightly below the average for startups in North America (3.04 years of life), Europe (3.19) and Latam (4.47). Moreover, 7 out of 10 startups (70%) in Spain have already launched their product and are generating traction, almost 10% more than last year.
2.- Employment generation. 69% of Spanish projects have between 2 and 10 employees, while 26% (9 percentage points more than last year) have between 10 and 50 professionals in their team. Hiring expectations for 2023 are positive in an economic environment conditioned by inflation.
3.-Revenues. In terms of revenue, 6 out of 10 startups in Spain are already generating revenue, 11% more than in 2021. 500,000 per year and 18% have positive EBITDA, which is six points more than in 2021 and 5% more than in the rest of Europe. In addition, 32% of startups expect to achieve positive EBITDA within a year.
4.- The profile of the entrepreneur. Mostly male (80%), 33 years old, highly qualified (most have a university degree, 70% have a Master’s degree and 16% are entrepreneurs with a PHD).
In addition to being profiles with significant prior professional experience: more than half worked in a company before launching their start-up, 24% already had an entrepreneurial project and 7% were employed in a start-up, while less than 1% were unemployed.
5.-Women entrepreneurs. The incorporation of women into the ecosystem continues to be a pending issue at a global level. In Spain, women entrepreneurs account for 20%, slightly above the European average (17%) and below North America (21%) or Latin America (24%).
6.-Better accompanied than alone. Although the lone entrepreneur is gaining weight in the national ecosystem, with 6% of startups founded by what is known as a solopreneur, it is still common to start up in a team, usually small and male: 60% of startups have between 2 and 3 founders, while 35% have more than 4. Startups with a mixed team of founders account for 35%.
7.- Serial founders. In line with previous editions, the serial entrepreneur is also a constant in the ecosystem, with 62% of startuppers having founded more than one project.
The probability of a startup’s success also increases the more experienced its founders are. While the percentage of sales of a project created by first-time entrepreneurs is less than 20%, this rate exceeds 70% among those who have created more than four start-ups.
8.-The majority of entrepreneurs’ fields of training are Engineering and Social Sciences. The Spanish ecosystem is increasingly knowledge-intensive and diversified, not only in terms of technologies, but also in terms of sectors.
The industries chosen: Fintech, Education and Health represent the top 3 industries, followed by: software development, e-commerce, social impact, agroTech, data and analytics. Rounding out the top 10 are two new areas: productivity services and media.
AI projects represent 16.8% in Spain, compared to 18.8% in Latin America and 22.4% in Europe.
10.-Financing. There has been a major shift in the sources of funding. We are moving towards an increasingly professional and balanced model, with private funds rising from 11% in 2018 to 32% in 2022, while equity has fallen from 60% to 46% over the same period.
Startups in Spain are not only looking for more funding (19%), greater visibility (19%) or strategic agreements (18%), they are also demanding in all regions improvements in taxation for their creation and attracting investors, as well as greater flexibility in hiring.
Entrepreneurship is a journey.
Creating startups to raise rounds to raise funds to raise more rounds to raise more funds and then close is not going to happen. Creating startups that are born with a purpose, that solve a pain, that improve people’s lives, will attract money and grow.
Almost no equipment. Almost no resources. Almost no money. Many startups are giving a master class to many large companies, with resources and money, on how it is possible to innovate, create and transform. My congratulations to the brave entrepreneurs.
To be an entrepreneur and not die trying, after the idea, it is time to create a purposeful brand, study the market well, understand the customers/users well, create good teams, control debt, get legal advice and improve people’s lives; to start with.
Life will not always go the way of the entrepreneur, but the good entrepreneur will always find a way. Or will build one.
“No matter how many customers you have, each one is an individual. The day you start thinking of them as this amorphous ‘collection’ and stop thinking of them as people is the day you start shutting down,” Dharmesh Shah, co-founder of HubSpot.
And people must always be at the centre of this path. Because as obvious as it may seem, without people there is no enterprise, no path.
(The above are some of the main conclusions of the ‘Map of Entrepreneurship 2022’, carried out by South Summit, in collaboration with IE University; via Revista Emprendedores).