How Does Founder Motivation Impact Success?

Discover how much founder ambition impacts startup scaling success.
Forrest Wright
on February 26, 2024

For startup founders, strong ambition and motivation are essential ingredients for success. This is why at Startup Genome, when we survey founders we ask about their motivations in creating a startup. Not only does this provide a compelling overview of founders’ mindset in a given ecosystem, but it can also reveal the traits most associated with startup success.

Getting Rich is the Most Common Motivation

In 2023, we published the Scaleup Report. In this report we compiled over 10,000 surveys of early-stage startup founders (with startups less than 4 years old at the time of survey), and calculated which of those startups eventually became a scaleup, defined as an early-stage startup that received a valuation of $50 million or more in the four years since their founding.

From our scaleup research, we observed that a founder’s desire to get rich was the strongest corollary to scaleup success among the six response options.

Ambitious Founders Tend to Scale at Higher Rates

However, only looking at this trait belies a deeper understanding of how founders calibrate their motivations with shrewd business sense. In order to get rich from their startup, founders need to think about how to expand their market, while not overextending themselves or their available resources.

This can be seen in how founders consider their Total Addressable Market (TAM), defined as the overall revenue available for their startup’s product or service if they capture the total market. Scaleup rates were higher for founders who stated that their TAM was either $10 billion and $50 billion, followed by those stating it was between $1 billion and $10 billion. Rates were significantly lower for low-TAM founders as well as for founders with very high TAM goals. This suggests that ambitious founders tend to scale at higher rates, but being overly ambitious might undermine their success.

Startups that Offer Globally Focused Products Scale at Higher Rates

Product offering and product-market fit are also important factors in scaleup success. From our scaleup research, we see that founders whose startups offer globally focused products scale at higher rates than those offering a local version — that is, a startup that applies a successful startup model from elsewhere to their domestic market (think of “Uber for x country”).

However, simply saying that therefore all founders should develop globally focused products would miss the critical element of matching a product to what market conditions dictate. This can be seen in how product strategy success varies across geographies.

Understanding Market Conditions is Vital to Scaling Success

In North America, particularly the U.S., startups with globally focused products tend to scale at much higher rates than startups that develop local version products. This makes sense given that US startups tend to be the ones developing products and models that get emulated elsewhere rather than the other way around. However, in Europe, the local version product strategy tends to be more successful for founders. There are multiple explanations for this, but for some time many European founders achieved success bringing innovative ideas from around the world to the high-income markets of Europe. While this is still occurring to a degree, we expect to see a greater share of globally focused products emerging from Europe in the future. This is especially true for European Cleantech startups as documented in Startup Genome’s recent Climatetech Report.

In sub-Saharan Africa, it is telling that local version products performed slightly better than globally focused ones, even if both scaleup rates were relatively low. In these markets, local version product strategies can be successful when founders emulate successful products from elsewhere and tailor them to the specific needs of their markets. In these contexts, focusing on global products will be much more difficult as many sub-Saharan African startup ecosystems do not yet possess the experience and resources necessary to develop products that can compete in global markets.

The takeaway of this research is that while founder ambition and motivation certainly matters, success is more likely when those traits are combined with a shrewd understanding of market conditions. Startup Genome has explored many ways founders can improve their business acumen, including by developing local and global connections to other founders, teaming up with experienced co-founders, and bringing on startup advisors among many other decisions. These are explored in greater detail in our Scaleup Report.

To learn more about founder demographics read Are All Startup Founders Nepo Babies?

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