Startups are a job engine—as a Bitkom study shows. However, the study also sheds light on the dark side of being a founder.
At the end of last year, Bitkom launched a study on the German startup scene, the Startup Report 2019321 IT startups provided the digital association with information on their economic situation, their personnel planning, their financing situation, the founders' personal environment, and much more. Although the surveys were conducted around March 2019 and thus date back some time, the results are worth a closer look.
Respondents in this country are increasingly assessing the general situation for startups: Half believe that the situation for startups in Germany has improved significantly or somewhat, while only one in nine sees a deterioration. Survey participants also see positive signs for their own companies: 39 percent expect an improvement, while 13 percent anticipate a deterioration.
Startups seem to have long been accepted as equal partners by established companies. 79 percent of respondents cooperate with companies from the 'old economy'. Old and new companies most frequently develop products and services together. Four out of five startups have had positive experiences with these collaborations.
Job engine startup
The startups surveyed employ an average of 15 people and planned to hire an average of eight new employees last year. The previous year, the companies hired an average of seven new employees. Currently, each startup has five vacancies.
To finance this growth, four out of five startups require fresh capital—an average of €3.2 million. Of these startups requiring capital, four-fifths are confident they will receive the necessary funding. Nevertheless, two-thirds of all respondents believe there is too little venture capital for startups in Germany.
Founders complete pitch marathon
To attract growth capital, startups need to attract attention. The preferred method remains a personal introduction of the company in a pitch. Larger startups with more than 20 employees, in particular, therefore engage in a continuous pitch marathon: an average of 260 pitches per year are presented to potential customers, business partners, and investors. Young companies with 10-19 employees still explain their business 103 times per year, those with 4-9 employees 75 times, and micro-enterprises with just 1-3 employees 44 times. On average, respondents pitch 121 times per year—that's a pitch every other workday.
Is founding power lonely?
Despite all the stress, the vast majority of startup founders are committed to their efforts: 85 percent would start a business again. For many, the personal circumstances aren't particularly rosy. 84 percent say they received no knowledge about starting a business at school. Half say their teachers were hostile to startups. And for at least a quarter of those surveyed, their own parents opposed them starting a business. Even after founding their business, many respondents report severe hardships, particularly in terms of time: Around half find little time for family and children, friends, and acquaintances.
