A Newsletter from Aura Workforce Analytics
đź’ˇ Diverse backgrounds and experiences are valuable: Successful founders come from various educational backgrounds, industries, and roles, demonstrating that a diverse range of experiences can contribute to success in the start-up world. Aspiring entrepreneurs should leverage their unique experiences and skills to create innovative solutions and differentiate themselves in the market.
‍
Balance of technical and soft skills is crucial: Founders most commonly hold a mix of technical expertise and soft skills, such as management, leadership, marketing, and entrepreneurship. Aspiring entrepreneurs should focus on developing both technical and soft skills to navigate the challenges of running a start-up and be well-rounded in their capabilities.
Read along to find about how do MBAs perform in these industries — their share in each sector, top MBA schools for employees, and how are they distributed in terms of seniority.
Learning from established companies and leaders: Founders' work experience often comes from leading companies and senior roles, providing them with valuable knowledge, networks, and resources. Aspiring entrepreneurs should seek opportunities to learn from these experiences and apply the insights gained to their own start-up ventures, ensuring they are equipped with the right skills and knowledge for success.
10.6% Surge in Demand for AI Professionals over Mainstream Software jobs in H1 2023
As the start-up scene has gained incredible traction over the last decade, more and more students and young professionals are aspiring to become entrepreneurs. The success of a start-up largely depends on the capabilities and background of its founders. Understanding the qualifications, skills and experience of these entrepreneurs is crucial to replicating their successes.
We leveraged the power of Aura to analyze founders, examining their typical experience and background to share insights on skills and experiences needed to replicate their success.
What are their typical demographics?
While there has been an expansion in start-ups outside the U.S. we see that it still holds the largest concentration of founders with 31%, followed by India with 10% and the United Kingdom with 8%. The remainder are lightly spread across Canada, Australia and Europe. This indicates that start-up founders are largely concentrated in a few developed countries, which offer more extensive resources, established ecosystems, and business-friendly environments to support their ventures.
From a gender and ethnicity perspective, founders are less diverse, being largely male (68%) and White (59%). However, there is a significant representation of Asian/Pacific Islander founders (27%), followed by Hispanic (9%) and Black (5%) founders. This suggests that there is still room for improvement as under-represented founders continue to face challenges in accessing funding and resources compared to their White male counterparts.
From a tenure perspective, we see that the sweet spot for venturing into business is after gaining 5 to 10 years of work experience (25%) followed by 11 to 15 years (23%). While there seems to be increasing pressure amongst students and young professionals to start a business straight out of university, only 7% of founders started their business with less than 5 years’ work experience. This experience often provides them with valuable knowledge, networks, and resources that contribute to the success of their ventures.
What is their typical educational background?
Successful founders come from a variety of educational backgrounds. In terms of the highest education obtained, 32% of founders hold a Bachelor's degree, followed by Master's degrees at 19%, MBAs at 8% and PhDs at 5%. Interestingly, 35% of the analyzed founders did not have information available about their highest education, which might suggest that some founders have chosen to follow the dropout cult or have chosen to not disclose their educational background.
Looking at the top 10 institutions where founders obtained their highest education, we can observe a mix of prestigious and lesser-known institutions. New York University ranks first, followed by the University of California, Berkeley, and the University of Phoenix. Other notable institutions in the top 10 include the University of Southern California, University of Texas, Stanford University, Boston University, Delhi University, and Chatrapati Sahu Ji Maharaj Kanpur University. This diverse mix of institutions suggests that successful founders come from various educational backgrounds, and , it is not the sole determinant of success in the start-up world.
The key takeaway from this analysis is that a diverse educational background can contribute to success in the start-up world. Aspiring entrepreneurs should not be discouraged by their educational path, as success is achievable with the right combination of skills, experience, and determination.
What is their typical work experience and skills held?
Founders come from a diverse set of industries; however, a significant portion are in the Software & IT Services sector (9%), followed by Corporate Services (5%), and Media & Communications (4%). Considering the remainder of the Top 10 industries, it is evident that founders have experience across various sectors, allowing them to leverage their knowledge and skills to identify opportunities for innovation and disruption in their respective industries.
When analyzing work experience prior to starting their business, we see that Microsoft, IBM, Deloitte, Google, and EY are the top 5 companies founders last worked at. The next five companies in the ranking are Accenture, Amazon, PwC, Oracle, and McKinsey & Company. These companies, known for their innovation, global reach, and competitive environments, provide founders with valuable experience and skills that can be transferred to their own start-ups.
Looking at the last job title held by founders, it is apparent that a significant portion were already in the start-up industry, having previously held the “Founder / Owner” title. Interestingly, many founders previously occupied senior leadership positions such as “CEO / Managing Director” or “Director / Partner / President”. This suggests that leadership and managerial skills are highly valued in the industry and are often necessary for successfully starting a business.
The above observation is confirmed when assessing most common skills held by founders, where “Management”, “Leadership” and “Marketing” are quoted as the most common skills held. That said, founders are seen to possess a mix of technical and soft skills that enable them to build and grow their companies. It also highlights the importance of being well-rounded and adaptable in the fast-paced start-up world.
In conclusion, the typical work experience and skills held by successful founders demonstrate the value of gaining diverse industry experience, working in leading companies, and cultivating a wide range of skills.
At Aura, we support this type of analysis by making workforce data readily available, enabling comparison of relevant metrics between cohorts of companies & candidates to develop a deeper understanding of workforce trends and drive meaningful change.
Caro-Joy Barendse
Project Manager, Aura