Three years ago, a team of researchers, entrepreneurs and data geeks set out on an ambitious mission: To put the world’s technology startups under the microscope in an effort to better understand why some succeed and why 90 percent eventually go the way of the dinosaur.
Fast forward to today, and The Startup Genome (as it’s now called) has analyzed data from over 100,000 startups around the globe and has conducted hundreds of in-depth, qualitative interviews with entrepreneurs and investors. The results provide an exciting look into not only what characteristics and qualities make for a successful formula, but how different startup ecosystems stack up with each other.
The team behind the project has also begun to leverage its unique data sets to create a benchmarking tool to enable entrepreneurs to evaluate their progress compared to their peers and help them make more informed product and business decisions. This month, after more than a year of testing and tweaking, the team finally released Compass into the wild.
Compared to prior iterations, Compass founder and CEO Bjoern Herrmann (who is also one of the co-founders of The Startup Genome Project) tells us, the now fully-baked startup benchmarking tool offers automated data collection from a host of tools and services popular among SMBs, including services like Salesforce.com, MailChimp, Google Analytics, Mixpanel, PayPal, Quickbooks and Stripe.
Using data derived from the sources, Compass then funnels your startup’s business metrics into its revamped dashboard, allowing them to view company benchmarks across a range of categories, configure an alert system to stay up to date on company revenue, churn rate, user growth rate, acquisition costs and so on, while offering visualizations of that data in correlation charts, graphs and via tailored, supplemental analysis.
But the real key to the new Compass product, Herrmann says, its the new dynamic system its team developed to generate benchmarks based on large data sets. Up until today, most benchmarking solutions have relied on 50-year-old methodologies to collect and analyze data, so, the team has instead developed a methodology designed specifically for Big Data analysis.
For example, prior iterations of Compass only grouped companies in to two categories — B2B or B2C — which, of course, is a fairly limited taxonomy given the diversity of startups out there. The new product, however, places companies along a continuous spectrum based on the “complexity of customer interaction,” Herrmann explains. On one end of the spectrum, for example, will be Google Search and businesses that rely on less complex customer interactions, while, on the others side would be, say, Oracle.
The spectrum for “complexity of customer interaction,” the founder explains, is defined by looking at the interplay between a business’ transaction and traffic history. The founder compares the methodology to Google’s first dynamic ranking system for indexing and search results, except, in this case, it’s the methodology used to determine the best benchmarks to use for your company. It’s also the technology that allows Compass to provide a similar level of benchmarking accuracy to a wide range of businesses — from restaurants to retail.
As of now, Compass is free to use and the CEO says that this will remain true for the forseeable future. However, Herrmann did says that the team has begun to test premium features, which will likely include full customization, additional filters, data segmentation and so on.
Up until now, the Compass team has made most of its money via R&D for governments and consulting firms and by offering sponsored versions of its “Startup Genome Reports.” Moving forward, Compass will also begin piloting a handful of potential revenue channels, including matching companies to value-add products and services, providing automated audits of startups for investors or bye working specifically B2B transactions, or companies within large organizations. The other option, Herrmann said, is to allow financial customers, for example, to manage their relationships with their tech customers.
Going forward, in support of its launch and the continuing experimentation with new revenue channels, Compass’ team has raised a total of $700K from, you guess it, a flock of Angels. Those angels include Amir Banifatemi, Anil Sethi, Ben Congleton, Christopher Grey, Clemente Germanetti
Daniel Recanati, Erik Jansen and more.
With its new money in tow, and 1,400 new businesses joining its platform over the last 10 days, Herrmann said that the team plans to put its capital to work hiring data scientists for its research project and engineers for Compass.