Under the Influence - 80+ Influencer Marketing Statistics (Infographic)
ByDragomir Simovic
March 07,2023
While influencer marketing isn’t exactly a modern invention, it has certainly reached new heights over the past decade. Back in the day, movie stars, athletes, and musicians could earn a pretty penny by promoting products and services. At the time, this was the most effective way to reach and influence a broad audience. But not anymore. Nowadays, the focus has shifted to “normal people” who the audience can relate to. Influencer marketing statistics show us exactly how much this trend affects our society and what we can expect in the future.
It might not surprise you to hear that influencer recommendations today mean a lot more to young people than celebrity blogs and endorsements. While celebrities often appear fake, influencers come across as more relatable, honest, and authentic. Because of that, many younger internet users rely on these individuals to help them decide what’s cool, what’s reliable, and what’s worth buying.
Influencer Marketing Stats (Editor’s Choice)
- In 2018, companies who used influencer marketing got a 520% return on investment.
- 49% of users rely on influencer recommendations for their purchases.
- In June 2018, Instagram reached one billion active users.
- Micro-influencers with fewer than 100k followers are responsible for the majority of posts on the platform.
- 66% of influencers on the web focus on fashion, beauty, or lifestyle.
- The primary concern for 42% of marketers is dealing with fake followers (bots).
Marketer and Influencer Stats
Analysts predict the influencer marketing industry will be worth $9.7 billion in 2020.
(Influencer Marketing Hub)
Marketers know that in order for their brand to reach its full potential on social media, they need to employ influencers. Year on year, the growth of this industry has been around 50%. In 2019, the industry was estimated to be worth $6.5 billion. And it will only continue to grow.
In 2019, nearly 90% of marketers ran multiple campaigns.
(Linqia)
The success of influencer marketing has driven up the number of campaigns marketers use today. One campaign is simply not enough to both drive brand awareness and generate sales, so the majority of companies will run multiple, sometimes simultaneous, campaigns. Among surveyed marketers, 24% of them ran more than five campaigns in 2019, with 16% of them maintaining an always-on campaign.
91% of marketers believe in the effectiveness of influencer marketing.
(Influencer Marketing Hub)
Influencer marketing stats from late 2019 show that, unsurprisingly, marketers put a lot of trust in their influencer campaigns. This is comparable to the number of respondents that planned to invest in influencer marketing during 2020, especially with how good ROI has been in the past several years.
When they pick influencers, 29.2% of marketers look at engagement rate as the main factor.
(SocialPubli)
Other figures show that 23% of marketers look at content quality, 21.2% focus on reach, while only 14.2% consider audience size. If we’re to trust these influencer marketing statistics, only 12.4% worry about how much the influencer costs. This suggests that the ROI is so good that most marketers don’t even think about the price.
77% of marketers believe micro-influencers will play a large part in the future of digital marketing.
(Linqia)
Considering that the majority of posts on Instagram are created by micro-influencers, it makes sense that they will continue to play a role in the future of marketing. Based on some influencer marketing facts, marketers predict that AI and live video will also be significant trends in the future.
Nano influencers are being requested more often than celebrities.
(Linqia)
A nano influencer doesn’t have a huge following - usually under 5,000 followers. But in the eyes of many marketing companies, they offer a better ROI than using a big-name celebrity.
Among the surveyed marketers, 25% want to work with nano influencers, compared to 22% who still prefer working with celebrities to promote their products. Celebrity influence is slowly dwindling because it’s too commercial. What people really want is a genuine connection, and nano influencers offer exactly the kind of authenticity that makes it possible.
Companies using influencer marketing saw a 578% return on investment in 2019.
(Influencer Marketing Hub)
This study used data from 2,000 companies. Compared to data from 2018, when the ROI was at 520%, this is quite a significant growth. This shows that marketers are getting a better understanding of employing these types of campaigns.
During the past year, 5% of brands spent more than $500,000 each on influencer campaigns.
(Influencer Marketing Hub)
The majority of marketers will not spend more than $50,000 a year hiring influencers. In fact, 43% spend less than $10,000 annually. Of course, the bigger the influencer, the higher the price goes, so a small portion of big brands will gladly spend much more than others for hiring the mega stars of social media.
In 2019, 57% of marketers said that they would increase their influencer marketing budget in the following year.
(Linqia)
Most experienced marketers know these ad campaigns work, so they’re willing to invest more and more in them each year. Even though influencer marketing ROI is lower now than it was a few years ago, we can expect things to pick up again.
Only 5% of marketers plan on spending half or more of their budget on influencer marketing.
(Linqia)
Traditional marketing is still the dominant form of advertising, even in 2022. While the trend of employing influencers is on the rise, with 43% of marketers planning to spend between 11% and 25% of their budget for influencer campaigns. Still, one-third of surveyed marketers don’t want to dedicate more than 10% of their budgets on paying influencers.
Repurposing influencer ads is the strategy of 89% of marketers.
(Linqia)
Once the content is produced and posted online, it’s out there forever. So, a logical step for marketers is to repurpose what they’ve already paid for. Companies will re-post paid content as either promoted posts across other social media channels or use it for organic growth, depending on what kind of content was produced in the first place.
According to Influencer Marketing Hub, 39% of influencer marketers use conversions as a primary measure of success.
(Influencer Marketing Hub)
Trends are also changing in the way the success of influencer marketing campaigns is measured. Previously, marketers used site engagement metrics, but in 2019 that trend was overtaken by calculating conversions. It makes sense, too. It’s one thing for a potential customer to just click the link, learning something about the brand, but it’s a whole other situation if they actually end up making a purchase.
71% of marketers keep up with the latest FTC regulations and know how to implement them.
(Linqia)
FTC guidelines are there to protect consumers and sanction influencers who don’t follow the rules. That’s why it’s important that marketers familiarize themselves with all the latest changes and modifications. All these regulations are clearly defined for each social platform, so there is zero room for error or misunderstanding.
On the other hand, only 14% of influencers are fully FTC compliant.
(Influencer Marketing Hub)
Even with many efforts by social media platforms to ensure ads are marked as ads, the majority of influencers still don’t mark their posts by the FTC standards. Analysts fear that this may lead to more drastic measures by the authorities, potentially leading to another “adpocalypse.” On the other hand, the situation is improving ever so slightly, since in 2018 this number was sitting at just 11%.
The primary concern for 42% of marketers is dealing with bots that might follow the brand influencer.
(Marketing Charts)
There are two main problems with an influencer having too many fake followers or bots. First off, having too many of these automatic fans might result in problems with the FTC, which could lead to account suspension. In addition, from a marketer’s point of view, there’s no point in paying for a campaign that mainly reaches fake users.
Social Influencer Marketing
64% of influencers say they would never accept a huge amount of money if it would cost them their followers.
(Hashoff)
This data shows most digital influencers nowadays value their fanbase more than money. The respect they get from their followers seems to be invaluable. That, in turn, makes them more desirable on their chosen platforms.
45% of influencers are contacted at least four times a month with campaign proposals.
(Influence.co)
It’s interesting to note that while almost half of influencers get at least four offers a month, there’s a good chance those offers won’t be accepted. In fact, 44% of influencers say they only accept one in four offers they receive. This suggests that demand for marketing influencers actually outweighs supply right now.
49% of influencers are paid a flat fee per picture, while 11% are paid based on performance.
(Influence.co)
Almost half of all influencers are paid per picture, which means that they don’t have to worry about audience engagement or any other metrics. Their only job is to post the picture and carry on with their normal work. It’s understandable why that business model is a lot more attractive to influencers than other alternatives, which could prove to be far less reliable.
66% of influencer networks focus on fashion, beauty, or lifestyle.
(Influence.co)
This information suggests that beauty and image trump all other concerns. Naturally, influencers are ready to help us ease our insecurities. The 66% share shows what kinds of products and services people are most likely to shop for online.
12% of influencers say that most of the time they have no control over the copy used in their promotions.
(Influence.co)
Among these influencer marketing statistics, one worrying snippet shows that 12% of influencers don’t even write their own posts. This flies in the face of the authenticity and honesty influencers are supposed to represent.
For 63% of campaigns, influencers don’t even use contracts.
(Influence.co)
Despite the fact that marketers spend billions of dollars on influencer campaigns, 63% of influencers still don’t use contracts to protect themselves or their work. This is a poor practice that is set to change as regulations get more and more rigid.
Instagram Influencers Marketing
Instagram has 1 billion active users.
(Hootsuite)
There’s no doubt that Instagram is one of today’s biggest social media platforms. In 2018, there were 1 billion registered users, a 1,000% increase since 2013. By the end of 2019, the monthly active user number has also reached 1 billion, solidifying Instagram as the platform your brand needs to utilize.
500 million Instagram users watch Stories every day.
(Hootsuite)
Even though they’re not originally Instagram’s invention, Stories have become hugely popular on the platform. These are photo or video posts available in a separate feed that automatically disappear 24 hours after being posted. Ability to link Stories to a website has increased their popularity among both marketers and influencers.
90% of Instagram users follow at least one brand on the platform.
(Instagram)
Another unsurprising fact is that fans will stay fans wherever they go. Instagram is no different. In fact, a vast majority of users end up following brand accounts, so that already creates a loyal fan base to which a company can promote its products.
Female influencers produced 84% of sponsored Instagram posts in 2019.
(Statista)
For years, beauty and fashion have been on the forefront of advertising on Instagram. Since these industries mostly have female consumers, it comes as no surprise that influencers are predominantly female.
The number of sponsored Instagram posts is projected to reach 6.1 million in 2020.
(Statista)
Looking at the Instagram influencer marketing statistics throughout the past several years, a trend can be seen regarding the number of sponsored posts. It is constantly on the rise, although not at the 100% rate we’ve seen from 2016 to 2017. In 2019, there were 4.95 million sponsored posts on Instagram, and in 2020 this number is expected to rise by more than a million.
A study from April 2018 found out that more than half of influencers use Instagram Stories as their preferred outreach method.
(eMarketer)
Instagram Stories were introduced in August 2016 and gave users a chance to create posts that only last for 24 hours. It is a great customer acquisition method because it allows influencers to reach people who don’t already follow them.
25% of all sponsored posts on Instagram are fashion-related, while food takes second place.
(Business Insider)
We’ve already mentioned how the influencer marketing industry revolves around beauty tips and lifestyle instructions, so it makes sense that fashion represents a quarter of all Instagram sponsored posts.
Micro-influencers with fewer than 100,000 followers are responsible for the majority of posts on Instagram.
(Socialbakers)
Nearly a third of all profiles on Instagram belong to so-called micro-influencers, who can have anywhere from 2,000 to 100,000 followers. The interesting thing about influencer culture is the fact that there’s room for everyone. In fact, top Instagram influencers with over a million followers only make up 1% of all accounts on the platform.
97% of marketers plan on using Instagram for their influencer campaigns in 2020.
(Linqia)
Instagram has finally overtaken Facebook as the most popular influencer platform. Not only are Instagram posts sitting at the top spot, but Stories are also making their way up - 83% of marketers are planning to pour their budgets into promoting their products with Stories produced by influencers. The reason? Vertical video. For 55% of marketers, vertical video will play a key role in 2020 campaigns.
YouTube Influencer Stats
10 brands spent $1 million each on sponsoring YouTube videos.
(Influencer Marketing Hub)
“This video is sponsored by…” You know the drill. Sponsored video segments, basically ads that are embedded into the video, are turning to be quite an investment for certain brands. These famous words were most commonly spoken for SkillShare, Squarespace, Nord VPN, Blue Chew, and DLive.
Brands spent more than $90 million on YouTube influencers during Q1 2020.
(Influencer Marketing Hub)
During the first quarter of 2020, more than 1,300 brands were spending money on sponsored content on YouTube. In total, there were 5,680 videos produced, amassing 704 million views.
On average, advertisers spent $16,011 on each sponsored YouTube video.
(Influencer Marketing Hub)
While sponsorships with top YouTube influencers don’t come cheap, the growth of micro and macro influencers lead to a wide variety of pricing tiers. Looking at the numbers during Q1 2020, we can see what amount of money on average is needed for each influencer campaign on the platform. In the future, analysts predict that YouTubers at or below 100,000 subscribers could be the biggest driving force for marketing campaigns.
Epic Games was the biggest spender in the first half of 2020 with a campaign worth $10.6 million.
(Influencer Marketing Hub)
The gaming powerhouse Epic Games, the owners of Fortnite and Epic Games Store, had a way bigger marketing budget for YouTube than anyone else. Sitting in second place is Bang Energy with $7.7 million, while SkillShare comes in third with $3 million in sponsored content expenses. Gaming is huge on YouTube and, with the world’s most popular game under its belt, Epic knew the value of promoting on this platform.
Four in 10 millennial consumers feel that their favorite YouTube influencer understands them better than friends or family.
(ThinkWithGoogle)
While these statistics might appear worrying, they certainly fit with the whole concept of influencers. Marketing to teens nowadays boils down to promoting normal, down-to-earth, relatable figures who understand what young people are interested in. That’s why millennial influencers are so effective. Because of that, teens, millennials, and other younger demographics feel a strong connection to them.
Half of YouTube’s top 10 earning stars are gamers.
(Forbes)
Industry statistics reveal that some of the most influential YouTubers on the platform are gamers. This reflects the continuous growth of the gaming industry, which is expanding rapidly. In an effort to compete with websites like Twitch, YouTube has also introduced streaming, which has further helped gaming channels gain prominence.
18% of users are influenced by YouTube when it comes to their purchases.
(Shane Barker)
YouTube is one of the biggest and most popular online platforms for product reviews. There are thousands of channels specializing in unboxing videos and hands-on reviews, all of which give potential customers a better feel for the product than written reviews. Influencers who create reviews often make deals with YouTube influencer marketing, in which they get free products, or even cash, in exchange for their reviews.
YouTube has the best engagement rate, ranging from 4% to 6.7%.
(CreatorIQ)
YouTube is a platform designed to drive engagement. Either by involving viewers in the discussion or by them sharing and liking videos, the drive to engage with content is inherently higher than on any other platform. Data from 2016 to 2019 demonstrates that Twitter has the lowest engagement rate, with 0.17% or lower depending on the audience size.
User Statistics You Should Know
49% of users rely on influencer recommendations for purchases.
(ION)
Online bloggers are so influential that almost half of users on the web rely on their recommendations when deciding to make a purchase. This shows that influencers are at least as important as all those hard-working marketers out there.
Influencer marketing statistics show that young people (ages 18-34) are more likely to buy a product endorsed by an influencer than one endorsed by a celebrity.
(Marketing Charts)
About 10 years ago, the go-to stars for product promotion were actors, musicians, sportspeople, and other celebrities. Nowadays, it’s all about influencers who seem a lot more trustworthy and relatable. Indeed, 22% of young people trust influencers’ choices, compared to just 9% who trust celebrities.
94% of users think authenticity and transparency are essential.
(Marketing Charts)
Authenticity and transparency are two of the most important traits in celebrity influencers. If they want to keep their followers, these social gurus need to be original, cultivate their own voice, and make sure that their behavior is completely transparent. This is the best way to earn their audience’s trust and respect.
19% of consumers rely on Facebook influencers when they purchase products.
(Shane Barker)
Statistics show that 19% of users turn to Facebook influencers for advice regarding product purchases. Although the platform is now less popular than its sister network, Instagram, it is still the preferred platform for thousands of influencer marketing companies.
What About Twitter?
You’ve probably noticed that we’ve mentioned pretty much every major social media platform except for Twitter. So, who are Twitter’s biggest influencers? What are some of the most interesting Twitter followers statistics?
Unfortunately, a lot of Twitter statistics revolve around the company’s own reports and estimates. Twitter seems to be desperately looking for a way into the world of real influencer marketing, even though the platform is inherently restricted by its 280-character limit for tweets.
Frequently Asked Questions
What are influencers?
Influencers are individuals who function as self-proclaimed authorities in their respective fields. They create content about anything from fashion and food to technology and art. Although they build up their reputation by offering authentic, unbiased opinions, many still team up with marketers to raise brand awareness, improve customer engagement, or simply explain the benefits of a product.
What is a social influencer?
Most of the time when people talk about influencers, they mean social influencers. That’s because social networks are the main platforms for reaching out to audiences and promoting posts. Currently, the most popular social network for influencers is Instagram, with over a billion active users.
How much do Instagram influencers make?
According to Ashley Hajjar, the director of influencer marketing at Rakuten, a single sponsored post can cost anywhere from $50 to $50,000 depending mainly on the popularity of the influencer. In general, the more followers the influencer has, the more money he or she can make from the campaign. Some experts estimate earning power at one cent per follower.
How to reach more people on Instagram?
According to influencer marketing statistics, the best way to reach new audiences on Instagram is through interesting Instagram Stories and posts that use new, relevant hashtags. The most important thing, however, is that you offer original, engaging content that people enjoy.List of
Sources
About the author
Dragomir Simovic is a staff writer for SmallBizGenius, where he regularly contributes well-researched, engaging content about the latest trends in the finance industry. As a successful entrepreneur and freelancer himself, he knows the ins and outs of running a small business and is eager to share his insights. When he’s not analyzing the latest finance news or thinking up startup strategies, Dragomir likes to play the guitar, discover new indie games, and sample craft brews – responsibly, of course.
More From Our Blog
It takes guts, determination, and a healthy dose of wild optimism to attempt building a startup of your own. It also takes years of hard work. Despite all this, 70% won’t live to see their 10th birthday. So, what is the startup failure rate in your industry, your city, your niche? And why do so many people give up on the idea they fought so hard for?
Most entrepreneurs are aware that it can be difficult to get repeat funding, build a viable business model, and grab their customers’ attention. But did you know most businesses fail simply because there is no market for their product? If you don’t do your market research properly, all your subsequent efforts to stay afloat will have been in vain.
It’s important to learn what percentage of startups fail in the industry you’re targeting. Don’t set yourself back by ignoring economic, financial, social, and cultural data on the current state of affairs in your particular niche. And make sure you have a good grasp on what the competition is doing so you can provide a product or service with a point of difference.
We’ve prepared an infographic on the latest and most relevant startup statistics to help your business get off the ground. To do this, we’ve compiled high-quality data from independent studies and reports, as well as government websites and academic papers. Our goal? To find out what prevents startups from failing, how to conduct the best market research, where to get funding, and how long it takes to start making money organically.
What are the best cities for startups? What are the most profitable industries for startups? It’s worth asking yourself all these questions before you begin investing time and money into an idea that may not succeed. With a steady focus and the right information, you’ll give yourself the best chance of getting the job done.
Top Startup Failure Rate Statistics - Editor’s Choice
Access to talent (63%) was the critical issue affecting most startups in 2019.
Only 6% of U.S. startups believe organic growth will be their company’s next source of funding.
Incompetence, at 46%, is the most common reason why businesses fail, according to a Statistic Brain study.
San Francisco and Silicon Valley account for 13.5% of global startup deals.
50% of U.S. startups say they were concerned trade policy between the U.S. and China will hurt their businesses in 2019.
Of the startups surveyed, 58% started with less than $25,000 and one-third started with less than $5,000.
More than 80% of U.S. startups said they planned to add employees in 2019.
Startup Failure Rate Statistics
Incompetence, at 46%, is the most common reason why businesses fail, according to a Statistic Brain study.
(Statistic Brain)
In this case, the term “incompetence” refers to a wide variety of inadequacies. These include emotional pricing, no experience in record-keeping, a lack of planning, no knowledge of finance, failure to pay taxes, and spending too much with limited business revenue.
The percentage of startups that fail after four years in the U.S. is over 50%.
(Statistics Brain)
Businesses in the fields of information (63%), transport, communication and utilities (55%), and retail (53%) are the most likely to fail. Their somewhat more successful counterparts include real estate, finance, and insurance (42% failure rate), along with education and health (44%).
65% of entrepreneurs admit they were not fully confident they had enough money to start their business.
(Business Insider)
Sadly, 93% calculated a run rate of under 18 months. Of these, 25% calculated a run rate of less than six months, while 36% didn't make any calculations at all.
Only 9% of businesses fail due to an utter lack of passion.
(CBINSIGHTS)
How many new businesses fail just because their owners simply don’t care enough to make an effort? Not too many, as it turns out. Still, this is a ridiculous reason to go down. As stated in the infographic, CBINSIGHTS performed post-mortems on 101 failed startups to learn what drove them to an early grave. Mostly, it was a lack of market need, inadequate funding, or an incompetent team.
In 2018, there was a decline of about 2% in cultural support, human capital, competition, internalization, and risk capital.
(Global Entrepreneurship Index 2018)
Unfortunately, the Global Entrepreneurship and Development Institute has noticed that the overall environment in 2018 is less supportive of startups and entrepreneurship.
56% of companies that raise a follow-up round of funding after their seed are then able to raise a second follow-up round.
(CBINSIGHTS)
Wondering how to make a startup company successful? Make sure you project a professional, hard-working image to earn subsequent funding. As this research shows, it’s easier to raise a third round of financing than a second one, with only 40% of businesses successfully raising their first post-seed round. After the third round, though, your chances of getting subsequent funding are likely to drop steadily.
Access to talent (63%) was the critical issue affecting startups in 2019.
(US Startup Outlook 2019)
Even the best startup business will face a number of challenges on its way to success. In the 2019 US Startup Outlook survey, nearly 1,400 technology and healthcare startup founders and executives cited the most important public policy issues affecting their business. The most compelling issues other than access to talent were healthcare costs (44%) and cybersecurity (40%). The final three concerns were customer privacy (33%), corporate taxes (22%), and international trade (also 22%).
In 2019, 50% of U.S. startups said that their more realistic long-term goal is to be acquired, 7% less than in 2018.
(US Startup Outlook 2019)
A larger percentage of startups compared to last year say they don’t know what their ultimate goal is, underscoring the difficulty of planning an exit strategy amid increased market volatility. With plenty of capital available, many corporations, private equity funds, and scaling companies have the resources to make acquisitions.
Only 6% of U.S. startups believe organic growth will be their company’s next source of funding.
(US Startup Outlook 2019)
Organic growth is crucial, as startup success statistics show. Other important sources of funding include bank debt, IPOs, mergers, government grants, ICOs, and crowdfunding.
50% of U.S. startups say they are concerned trade policy between the U.S.A. and China would hurt their business in 2019.
(Exploring the Factors of Startup Success and Growth)
Of those, 33% are somewhat worried, while 17% are very concerned. This might be due to China’s “Made in China 2025” plan. This is a strategic project issued by Chinese Premier Li Keqiang and his cabinet in May 2015. In short, China plans to move past being the world’s “factory” and start producing higher-value products and services. The small business survival rate – which currently sits at 30% past the 10-year milestone – might not drop because of this economic shift. There is another issue, though. According to a Churnbase study, China has more unicorn companies than the U.S.A., in spite of America being the primary source of venture capital.
Startup Trends You Can Focus On To Succeed
Of the startups surveyed, 58% started with less than $25,000 and one-third started with less than $5,000.
(Business Insider)
Kabbage recently polled 600 thriving U.S. small business owners to better understand their cash flow issues. Admittedly, these small business owners indicated they had at least some knowledge of how to build a startup. In many cases, this knowledge included experience in financing and bookkeeping (35%), legal and compliance (29%), and marketing and advertising (28%) when starting their business. Maybe the motto that “it takes money to make money” doesn’t apply all the time.
Globally, product innovation scores have increased by 22% since 2017, while startup skill scores have risen by 11%.
(Global Entrepreneurship Index 2018)
The Global Entrepreneurship and Development Institute came up with these figures. It is one of the top research centers focused on understanding and improving the relationship between entrepreneurship, innovation, and prosperity. Based on the organization’s findings, people are getting better at understanding and identifying successful startup business ideas and turning them into useful products.
60% of U.S. startups expected business conditions for their company to improve in 2019, 1% less than in 2018.
(US Startup Outlook 2019)
Entrepreneurs’ hopes and dreams are slightly grimmer than in 2017. On the other hand, 31% of respondents believe that business conditions will stay the same. As many as 9% think conditions are likely to get worse, a 4% increase since 2018.
On average 15% of micro-enterprises are traders, while the share is 60% for small enterprises.
(OECD)
The success startups expect to achieve seems to revolve mostly around trade. A 2018 OECD report on entrepreneurship classified micro-enterprises as having between zero and nine employees (zero meaning the owner is the only one working). According to this measure, a small enterprise employs between 10 and 49 people.
Organizations’ capacity to channel innovations to the economy is more potent in innovation-driven economies (1.55%) than in efficiency-driven (1.17%) or factor-driven economies (-0.59%).
(Global Entrepreneurship Index 2018)
Successful startup businesses identify and understand how developed their country’s economy is before they decide what startup idea to pursue. Factor-driven economies rely mainly on unskilled labor and natural resources, while efficiency-driven economies are characterized by more efficient production processes and higher quality. Finally, innovation-driven economies depend on skilled, educated, and knowledge-based labor, with a more developed service sector.
Scores on the Global Entrepreneurship Index have improved by 3% on average since last year.
(Global Entrepreneurship Index 2018)
The GEI analyzes startups’ health based on 12 main factors. These startup success factors include product innovation, process innovation, human capital, cultural support, and the perception of opportunities.
71% of surveyed U.S. startups have successfully raised capital in 2018.
(US Startup Outlook 2019)
A quarter of these businesses don’t consider the fundraising environment to be challenging. That may be because there is currently a trend of venture capitalists and private equity firms investing larger sums into a smaller deals. These startup trends only apply to high-performing young businesses, however. Struggling startups are finding it increasingly more difficult to raise funds.
More than 80% of U.S. startups said that they planned to add employees in 2019.
(US Startup Outlook 2019)
The success startups hope to achieve often relies on paying a bunch of new employees to do the heavy lifting, so to speak. As many as 29% of entrepreneurs recognize that it’s extremely challenging to find talent with the necessary skills to grow their businesses. Another 62% say it is somewhat challenging. Startups are most in need of filling product development, sales, and technical positions.
Startup Guide: Ageism, Racial Bias, and Venture Capital
In 2019, the percentage of startups with at least one woman on the board of directors increased to 37%.
(US Startup Outlook 2019)
That’s the highest result since SVB started doing research in 2015. Additionally, 53% of startups now feature at least one woman in an executive position, a 10% increase compared to last year.
37% of founders believe startup investors show some kind of age bias against them.
(State of Startups)
In 2018, the State of Startups annual survey interviewed hundreds of venture-backed founders, who talked about what it’s like running a tech startup today. On average, founders think ageist attitudes begin once they turn 46.
In 2018, 26% of surveyed tech startup founders believe a race bias is exists.
(State of Startups)
Small business stats and startup stats don’t usually cover these issues, but discrimination remains a huge problem. In the State of Startups annual survey of 529 founders, almost 30% agreed people in the American startup scene need to do more to fight racial bias.
In 2019, 52% of U.S. startups expected their company’s next source of funding to be venture capital.
(US Startup Outlook 2019)
That’s down 2% from 2018. Due to limited revenue or high costs, most of startups’ small-scale operations aren’t sustainable in the long run without additional funding. That’s why, after receiving their initial investment, most young startups will either fail or need subsequent investments. As for subsequent investments, 17% of the U.S. startup budget comes from angel investors, micro VCs, or an individual investor. Only a small number of companies become profitable solely thanks to their first investment. As many as 8% hope for private equity, while 7% rely on private investors.
On average, a typical angel investor in the U.K. holds their investment for six years.
(The UK Business Angel Market)
A study of the U.K. Angel Business Market came up with this figure. Startup statistics in the UK show hugely positive signs of continued growth in the angel market. In fact, 41% of angel investors increased their investments during the 2016-17 tax year. Growth has been impressive, with 69% of investee businesses surpassing their expectations.
San Francisco and Silicon Valley account for 13.5% of global startup deals.
(StartupsUSA)
San Francisco tops the list, playing host to nearly 10% of global venture capital deals. In other startup news, New York is the runner up, with 6.5%. London is next, with 5% of global venture capital deals, half of what San Francisco provides. Finally, the heart of Silicon Valley, San Jose, accounts for almost 4% on its own. Boston and L.A. each account for more than 4% of all startup deals on a global scale.
Bangkok takes first place for global growth of venture capital deals, with an increase of more than 600% between 2010 and 2017.
(StartupsUSA)
Thailand's successful startup industry expected to see double-digit growth in 2018, driven by local funding and foreign venture capital. Local startups are being encouraged by government support, and Thailand is promising as overall costs for startups are low relative to Singapore.
Globally, the majority of enterprises (between 70% and 95%) are micro-businesses, meaning they have fewer than 10 employees.
(OECD)
Startup statistics show that in most OECD economies, small and medium-sized enterprises account for over half of all employment and value added within the business sector. These are either single-person businesses, where a freelancer opens a firm and is self-employed, or a partnership of some sort. Small businesses such as these are easier to manage. Since poor time and resource management are some of the most common causes of the high startup failure rate, this reluctance to start big is probably a good idea.
In most OECD countries, venture capital constitutes less than 0.05% of GDP.
(OECD)
This is according to the OECD, an intergovernmental organization consisting of 36 member countries. The two major exceptions to the small GDP percentage of venture capital are Israel and the United States, where the venture capital industry is more mature and represents more than 0.35% of GDP.
Tech Startup Statistics
The fastest-growing tech startups are in advanced manufacturing and robotics, which is growing at a rate of 189.4%.
(Global Startups Ecosystem Report)
According to a 2018 report, advanced manufacturing and robotics has the best five-year growth rate of any tech subcategory. This stat specifically measured early-stage deals from 2012-17.
Agtech and new food is the second-fastest-growing sector for startups, with a growth rate of 171.4%.
(Global Startups Ecosystem Report)
The 2018 Global Startup Ecosystem Report found agtech businesses to be among the most profitable startups. The agriculture industry employs a huge number of people and adds $3.2 trillion annually to the global economy. Now, digitization is transforming this vital industry, especially in the fields of automation and quality control.
Blockchain is the third-fastest-growing tech startup category, with a 162.6% growth rate.
(Global Startups Ecosystem Report)
Blockchain is still in the emerging phase of the startup lifecycle. This peer-to-peer value exchange eliminates the need for third-party mediators. The technology has applications across myriad industries, particularly within the financial services sector. When you look at tech startup trends, nothing’s hotter right now than blockchain.
AI, big data, and analytics are the fourth-fastest-growing tech startups, at 77.5% growth rate.
(Global Startups Ecosystem Report)
This sub-sector is growing strongly and is much closer than many other sub-sectors to the mature phase, encompassing 5% of all global startups. Worldwide GDP could grow up to 14% by 2030 as a result of AI, which would mean an additional $15.7 trillion for the global economy.
Why Some Startups Succeed (and Why Most Fail)
Market research: You’ve fulfilled your lifelong dream by starting a real estate agency. But the area you should be covering is already packed with realtors, and your service is surplus to the market’s needs. You fail.
Business plan: Identifying market demand is just the beginning. You need to split your business plan into small, achievable goals, and predict potential problems and solutions.
Funding: Whether you’re backed by a venture capitalist, an individual contributor, or the government, your business will probably need repeat investments. The best startup advice you can get is to not stretch for cash during your first year, or you might never get off the ground.
Location and marketing: An integrated, multi-channel online presence is a must for any business to survive in the 21st century. If you open a coffee shop with no website or social media presence in a neighborhood that couldn’t care less, you’re going to have a bad time.
Knowledge: The truth is that some entrepreneurs take up this challenge with little to no previous knowledge of finance, accounting, or their niche. Make sure you enroll in courses to learn the skills you need before you try to break into the market.
Conclusion
If you want to succeed, a positive attitude and hard work alone aren’t going to cut it. You need to know, not hope that your business will be a success. The startup success rate becomes less favorable with every year your business keeps operating, and as time goes by, survivors are increasingly rare. You won’t get too many shots at building a profitable company, so time and quality information are of the essence.
Don’t be fooled: the myth of the personality cult, maverick tech entrepreneur who makes millions winging it is a sham. If you’re born into considerable wealth, you might be able to pull that off. The chances are, though, that you’ll only succeed if you work harder and smarter than your competition. Over-prepare, read up on all the you can get your hands on, then prepare yourself for the ultimate leap of faith so you don’t become just another number in the startup failure rate.
By Andrea ·
May 18,2022
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