47 Mobile Marketing Statistics to Transform Your Business

ByJulija A.
March 17,2022

According to our stats, there’s a high chance you’re reading this article on your phone. 

That small gadget we keep in our purse or pocket has a profound impact on how we spend our day. From taking photos and sharing our thoughts on social media to managing work and shopping, our whole life is in the palm of our hands. It makes sense that this magic box remains with us at all times. 

Several years ago, phones started overtaking desktop computers as the browsing tool of choice. Our mobile marketing statistics show that this trend will continue to grow. There are new ways to market goods and services to customers, and any business that wants to take advantage of this shift needs to have a good advertising strategy ready. 

We’ve compiled a list of useful stats that marketers and businesspeople can use to learn about the latest trends in mobile advertising. If you’re ready to learn more, just keep reading. 

Top Mobile Marketing Statistics

  • Today, there are 5.11 billion unique mobile users on the planet.
  • People are more than 60% less likely to purchase from a brand after a negative mobile experience.
  • 70% of smartphone users have bought something in a store after using their phone to discover more information.
  • Cellular phone user numbers are expected to reach 63.4% of the global population in 2019.
  • 93% of businesses with an advanced personalization strategy experienced revenue growth in 2018.
  • Mobile accounts for 72% of U.S. digital ad spending.
  • Mobile devices are used for over 40% of online transactions.
  • Marketers and advertisers put 51% of their budget into mobile ads.

General Mobile Marketing Stats

Today, there are 5.11 billion unique mobile users on the planet.

(DataReportal)

The number has grown by 100 million since last year – a little over 2% – and it isn’t showing any signs of slowing down. Bear in mind that there are 7.53 billion people in the world. With such a large number of them going mobile, businesses will have a lot of opportunities to reach consumers through clever marketing strategies.

85% of internet users owned a smartphone in 2017.

(Smart Insights)

Smartphone ownership statistics show us that most people who regularly access the internet own a smartphone. While smartphones are considered advanced technology, it’s easy to find fairly inexpensive devices or even get one for free when signing a contract with a mobile provider. The latest mobile phones are a pricey investment, but almost anyone can get a basic model with ease.

U.S. adults spent an average of three hours and 23 minutes per day on mobile devices in 2018.

(Statista)

The average time spent on the phone every day just six years ago was an hour and 22 minutes. Since then, it has more than doubled. Nowadays, many of us spend our work breaks checking emails and social media, and we also like to keep in constant touch with our friends and family when they’re away. As such, consumers and marketers are both becoming dependent on their favorite handheld devices.

Americans check their phones 14 billion times a day.

(Deloitte)

If you were wondering just how many times American users pick up their phone during the day, you might be shocked to learn that this number is 14 billion, and rising. Mobile usage statistics show that we’re becoming increasingly dependent on our mobiles and that they’re now an integral part of our lives. Try to remember when last turned your phone off or spent a whole day without checking it. To a lot of people, the very idea is becoming unthinkable.

Mobile data traffic around the world was projected to increase seven-fold between 2017 and 2022.

(Cisco)

When WiFi is unavailable, most people rely on their mobile data to access the internet. The compound annual growth rate (CAGR) of mobile traffic is expected to reach 46%, according to Cisco’s Global Mobile Data Traffic Forecast, and connection speeds will be three times faster by 2022.

Cellular phone user numbers are expected to reach 63.4% of the global population in 2019. 

(Statista)

This is yet another statistic that confirms the whole world is going mobile. According to Statista, almost two-thirds of the world’s population will have a phone by the end of 2019, and that number will keep rising each year. But how many people have smartphones in the U.S.A.? Statista says 265.9 million, and that number is expected to rise to 285.3 million by 2023.

Google drives 96% of mobile search traffic.

(SEO Leads)

This is followed by Yahoo at 2% and Bing at 1%. Of course, Google is the number one search engine all over the world, and both desktop and mobile users rely on it for almost all their inquiries.

80% of Alexa Top Sites were mobile-adaptive in 2017.

(Mobiforge)

Alexa Tops Sites is an Amazon mobile site that ranks high-performing websites according to the Alexa Traffic Algorithm. These figures show that in 2017, 80% of the top 100 sites had been optimized for mobile, as were 90% of the top 10 sites.

Mobile accounts for 69% of digital media time.

(comScore)

According to mobile marketing statistics, most users now prefer consuming digital media through their phones. Desktop has fallen from favor and accounts for merely one-third of total digital media time. If you want to stay on track and offer the best experience possible to consumers, you have to take this stat into consideration and optimize your website.

More than 80% of time using mobile devices is spent in apps.

(SmartInsights)

Given the quality of content and easy-to-navigate interface apps provide, it’s no wonder users spend the majority of their mobile time using their favorite apps. They spend the other 20% on their mobile web browser.

Mobile accounts for 72% of U.S. digital ad spending.

(eMarketer)

Mobile marketing stats show us that marketers are fully aware that the majority of consumers now spend most of their internet time on their phone. Ads that target mobile users are becoming more effective, so companies need to start investing in this approach if they want to stay at the top of their industry.

Mobile vs Desktop

Mobile devices accounted for 73% of web traffic in 2018.

(Zenith Media)

According to Zenith’s Mobile Advertising Forecast, tablets and phones are the primary means of accessing the internet right now. This number has more than doubled from 2011, when mobile internet usage was around 35%.

Google is introducing mobile-first indexing in 2019.

(Marie Haynes)

This is happening as we speak. Since most users are switching to phones instead of using desktop devices to surf the net, Google has decided to introduce mobile-first indexing to its search function. This means mobile sites will soon be more important than desktop sites in Google’s algorithm. Optimizing your site accordingly is very important if you want to rank highly on search engines.

60% of respondents check their work email on a smartphone and 14% on a tablet.

(Fluent)

People aged between 18–24 are particularly reliant on their handheld devices—81% of them use their phones to check their work email. Phones are generally a lot easier to use on the go, so a high proportion of consumers use them to stay organized even when they aren’t home.

Mobile devices are used for over 40% of online transactions.

(Think With Google)

Checking emails isn’t the only thing people like doing on the go. Mobile marketing statistics show that many people now use their phones to shop online, too. Consumers like having all their favorite online stores within reach at all times. As more and more businesses optimize their websites for mobile, transactions are becoming more frequent.

Desktop has a 3.9% conversion rate compared to mobile’s 1.4%.

(Smart Insights)

While people love using their phones to shop, stores don’t always make it easy for them. Most online retailers still don’t have fully-optimized sites, and it’s turning a lot of customers away. If a consumer can’t view a site on mobile, then they’re bound to get frustrated and bounce before making any purchases.

52.2% of all website traffic worldwide came via mobile phones in 2018.

(Statista)

In 2017, this number was 50.3%. For people in many countries, mobile phones are more accessible than desktop devices, so these stats aren’t surprising. The number of mobile web users is on the rise because phones offer us a cheap, easy way to access the web, no matter where we are.

96% of Facebook users access their social media through mobile.

(Statista)

Social media mobile stats indicate that users prefer accessing their Facebook accounts via their mobile phone. U.S. users seem to be abandoning their trusty old desktops, and the change is particularly obvious when it comes to social media usage. Our social life is inextricably connected to our phone, so most users prefer to keep all their contacts and social interaction completely mobile. As such, it’s never been more important to be present on social media with a Facebook mobile site.

92% of millennials own a smartphone, compared to 85% of Gen X and 65% of baby boomers.

(Pew Research)

The younger the person, the more likely they are to rely on smartphone technology. But what about the tablet vs smartphone debate? This is where the stats might surprise you. About 64% of Gen X owns a tablet, compared to only 54% of millennials and 52% of baby boomers. In general, people seem to see a phone as a versatile communication device, whereas most people use tablets purely for entertainment purposes.

More than 50% of YouTube video views come from mobile.

(Google Support)

What percentage of video views on YouTube come from mobile devices? Apparently, more than half. More than a billion people watch YouTube every month. This is a huge potential audience for marketers who optimize their video marketing for mobile devices.

User Habits

74% of smartphone users look for the most relevant information without considering which company provides that information.

(Think With Google)

According to Think With Google, most users will simply click on the most relevant link after conducting a mobile search. It’s more important for them to find out what they need to know than to show any sort of brand loyalty. Companies that want to get the clicks have to provide the most relevant, up-to-date information in order to get consumers to visit their site. Once those customers arrive, the website must provide an easy, seamless experience.

According to Google data, 70% of mobile searchers who’ve recently made a purchase have clicked to call a business from the search results page.

(Google Blog)

The presence of a phone number in search results (regardless of whether they’re paid or organic) lends extra credibility to a brand. Mobile marketing stats indicate that this makes the shopping process easier and more pleasurable, and consumers are more likely to trust the company and get in touch with it. If you want your audience to perceive you as a reliable business, make sure all your contact info is easy for them to find.

People are more than 60% less likely to purchase from a brand after a negative mobile experience.

(Think With Google)

Even if your product is great and most of your customers have a smooth online experience when using a desktop device, you can turn people away if you don’t have a user-friendly site on handheld devices. You have to optimize mobile for your business and create a great site that consumers won’t have trouble navigating. Bad web design can put users off, and your conversion could suffer dramatically if you aren’t careful.

Watch time of “does it work” videos has grown more than 11-fold as consumers seek out visual proof that the items they’re considering are worth it.

(Think With Google)

People want to be well-informed. They very rarely purchase products without checking them out online first, and as such seem to focus on YouTube reviews to figure out whether an item is worth their money. Consumer mobile trends show that users watch “does it work” videos to see what others have to say, so it’s not a bad idea to invest in PR packages and send your product to a few famous influencers. Allowing them to test it out in front of their camera will help your advertising efforts significantly.

(Google Partners Certification Exam)

According to Google, phone users are very responsive to ads. Mobile phone advertising influences consumers to do product research and make purchases, as long as the ads are relevant to their interests. Targeting the right demographics and reaching the specific people who will be genuinely interested in what you have to offer is a surefire way to increase conversions through Google ads.

70% of travellers who own smartphones use them to research travel.

(Think With Google)

What’s the best way to kill time when you’re bored at work? Plan your next vacation, of course. Most users rely on their smartphones to research destinations and travel deals, and if they need a good hotel mobile marketing can point them in the right direction. If your strategy is on point, it could be your business they reach.

78% of shoppers who are on holiday use smartphones to research physical shops before they visit.

(Think With Google)

Roughly 61% of shoppers would rather purchase things from brands that have both a physical store and an online store. What’s even more surprising is that nearly 80% will use their smartphone for physical shopping as well—from researching the product they want to buy to comparing prices and finding the best deals. That’s why it’s so important for retail brands to enable customers to view their website on mobile phones.

45% of people would rather stop seeing their friends in person than give up their phones.

(Boston Consulting Group)

This study by Boston Consulting Group shows just how entrenched our dependence on our phones has become. Among other surprising stats, it turns out that 64% of people would give up dining out, 36% would give up electricity in their home for 12 hours a day, and 51% would give up one day off every week.

A positive brand experience on mobile will make 89% of people more likely to recommend a brand.

(Think With Google)

Positive consumer experiences are the key to success. Mobile trends show us that customers always favor the brand that has already shown itself as dependable, and they’re eager to recommend it to their friends and family. Invest time in your customers to create a loyal mobile user who will want to promote your business and help you grow.

What is Mobile Marketing and How Does it Affect Your Company?

Marketers and advertisers put 51% of their budget into mobile ads.

(HubSpot)

Mobile marketing has become an incredibly effective way to gain customers and drive conversions. Most marketers now invest in it heavily, and the majority of the budget goes into creating eye-catching, interesting ads.

In 2018, the Apple App Store registered a revenue of $46.6 billion.

(Statista)

App development has become one of the most profitable jobs in the digital industry. Making sure your business has an app to accompany your products and services is an important part of any mobile marketing strategy, especially if you want to increase customer engagement. Phone usage is growing, and people are spending most of their time interacting with various apps. You need to be present here to make the most of the opportunity.

70% of smartphone users have bought something in a store after using their phone to discover more information.

(Think With Google)

Smartphones give us quick access to any kind of information we might need. If you provide your users with an easy way to get details about your product, they’re a lot more likely to make a purchase after seeing your online ad.

69% of smartphone users would buy from stores that have mobile sites that cover their questions or concerns.

(BrightEdge)

Mobile marketing statistics show that users are quick to trust companies that go out of their way to provide answers to their questions. Showing consumers that their concerns are important to your business can help you gain their loyalty.

Two-thirds of smartphone users are more likely to buy products or services from brands with location-customized apps.

(Think With Google)

Localized ads are a great way to anticipate your customers’ needs and show them relevant content. People are more likely to click on an ad if it shows them a boutique in their neighborhood than if it suggests something that’s miles away.

51% of customers say they use mobile devices to discover new brands and products.

(BrightEdge)

Smartphone statistics present us with another interesting fact: Users actively seek to improve their own shopping experience. They are willing to engage with new brands and will search for products that interest them.

93% of businesses with an advanced personalization strategy experienced revenue growth in 2018.

(Monetate)

Localization isn’t the only trick you can use to get people to click on an ad. Personalized ads according to age, gender, and interests can be extremely effective and increase conversion rates for any kind of business.

M-commerce is yet to boom and is predicted to account for 53.9% of all eCommerce sales by the end of 2021.

(Statista)

Consumers want to shop from their phones. It’s easy, it’s quick, and mobile marketing companies are cashing in on this by providing users with faster checkout processes when making a purchase. Brands that want to increase their sales should jump on the train and make it easy for phone users to do their shopping.

A delay of just one second in page response can reduce conversions by 7%.

(Neil Patel)

Mobile users are becoming impatient—a delay of just a single second makes it more likely they’ll bounce off the page. According to Neil Patel, this means an eCommerce site that makes $100,000 per day could potentially lose $2.5 million in sales in a year.

Android accounts for 68% of the global mobile advertising market.

(Smaato)

Android holds a particularly large advertising mobile phone market share, especially in emerging economies such as India, Argentina, and Indonesia. However, while it might look like Android is dominating the market, iOS has much higher eCPM (ad revenue generated per 1,000 impressions).

Business and Mobile Marketing

70% of B2B buyers increased mobile usage significantly over the past few years, and 60% expect this usage to continue to increase.

(Boston Consulting Group)

B2B purchases are now taking place online, with a significant portion of B2B owners using phones to do their shopping. With this mobile market growth overtaking the business sphere, companies must now invest in advertising if they want to reach their audiences.

80% of B2B buyers now use mobile at work.

(Boston Consulting Group)

You probably already suspected it. Now Boston Consulting Group has the evidence to show that most of us are using our phones at work. With the number of devices growing, a lot of companies are allowing, or even incorporating mobile usage at the workplace, and B2B buyers are mostly using this technology for business purposes. That’s why providing a smooth digital experience is so important. Mobile media can influence purchase intent, and companies who want to attract user attention need to develop a marketing strategy to suit the shifting trends.

47% of businesses with over 50 employees brought an app to the market before 2017.

(The Manifest)

Apps are time-intensive and expensive to create, but building one can benefit small businesses who are looking to cater to their audience and present themselves as a modern company. If your firm wants an app to accompany the product you offer, then investing in good mobile marketing services and app development could make a huge difference. It will give consumers a new way to interact with your business and build loyalty to your brand.

57% of users say they won’t recommend a business with a poorly-designed mobile site.

(Formstack)

A well-designed website is already a prerequisite for success, but nowadays you need to worry about more than just the desktop version. If your customers encounter a problem like poor user interface, slow loading times, or bad design on your mobile site, they’re unlikely to have a pleasant experience, and they’re even less likely to recommend the brand to their friends. That’s why mobile website optimization is important for absolutely every business that wants to increase its online presence. By providing enjoyable user experience across all platforms and devices, you’ll increase your conversion rate and satisfy your customers. Hiring a reliable UX design agency to ensure this is a worthwhile investment.

According to 61% of users, if they don't find what they want immediately on a mobile site, they'll just head to another site straight away.

(Think With Google)

If you don’t provide the information or the product the customer wants and needs, or if your site isn’t mobile-optimized, people will move on to your competitor’s site without pause. The best mobile website is the kind that includes less text, has a vertical format, and puts emphasis on videos, infographics, and other media that’s easy to consume on a phone.

Mobile influences 40% of revenue in leading B2B organizations.

(Boston Consulting Group)

B2B industries traditionally depend more on sales than marketing to drive revenue, and mobile sales are becoming more frequent. Given that 50% of B2B search queries today are made on phones, marketers need to start investing more in responsive web design.

Mobile use at work will increase to three hours a day by 2020.

(Think With Google)

Mobile marketing stats show that B2B workers are becoming shrewder when it comes to technology. Driven by the overall increase in phone usage over the years, it would seem mobile for business is now part of the everyday routine for many employees.

91% of mobile users consider access to quality content to be a high priority.

(CardTapp)

Content marketing stats prove that content is one of the best ways for consumers to get to know a brand. Companies should create high-quality content and make it available across all platforms if they want to increase their lead generation. is one of the best ways for consumers to get to know a brand. Companies should create high-quality content and make it available across all platforms if they want to increase their lead generation.

To Summarize

These mobile marketing statistics give us an insight into how digital technologies are shaping the market. Current leaders in revenue growth are all optimizing their businesses for mobile use, and those who don’t want to lag behind need to invest resources into doing the same thing.

To thrive, you must build strong, mobile-friendly websites and focus your attention on consumer trends and preferences. The sooner you do this, the less chance there is you’ll be left behind in the race.

Sources

About the author

Julia A. is a writer at SmallBizGenius.net. With experience in both finance and marketing industries, she enjoys staying up to date with the current economic affairs and writing opinion pieces on the state of small businesses in America. As an avid reader, she spends most of her time poring over history books, fantasy novels, and old classics. Tech, finance, and marketing are her passions, and she’s a frequent contributor at various small business blogs.

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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.
By Dragomir Simovic · May 18,2022
From eCommerce stores and brick-and-mortar boutiques to finance consulting, art galleries, and craft breweries, small businesses are as varied as they are numerous.
By Julija A. · December 16,2022
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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