Endeavor Insight’s Top Research Findings from 2022
Last year, Endeavor heard from more than 740 founders in 12 markets around the world. This work underscored the importance of helping more founders scale because of their contribution as leaders and role models for the next generation. Here are the top 10 findings.
Endeavor’s Top 10 Findings from 2022
1. What can founders do to have the greatest multiplier effect in an ecosystem? Investment and mentorship from individual founders can spark generations of new entrepreneurs.
The Multiplier Effect has helped grow ecosystems around the world. Riyadh’s tech sector is fortunate to have many founders serving as active mentors and investors for other entrepreneurial companies in the local community. The most influential entrepreneurial company in the tech sector is Unifonic; its founders Ahmed and Hassan Hamdan are active mentors in the ecosystem, having supported more than 10 other companies. Zid is another important scaled company in the network. The founders Sultan AlAsmi and Mazen AlDarrab have both served as mentors, and Mazen is an active investor. The network map below demonstrates the connectivity among tech founders in Riyadh.
2. What can founders do to boost the growth of entrepreneurial ecosystems? Founders who pay it forward to other entrepreneurs help ecosystems thrive.
Previous employment, mentorship, and angel investment from successful founders help companies scale. As the graph below shows, founders who previously worked at a scaled climate tech company were more likely to scale their own company. This pattern holds true for founders who received angel investment or mentorship.
3. What are the top challenges that high-impact founders face that prevent further ecosystem growth? Access to talent is a top challenge faced by entrepreneurs.
In Spain, a combination of factors has led demand for talent to outstrip supply, leading to scarcity and salary inflation. The explosion in remote work since the start of the COVID-19 pandemic has led companies in other tech centers to poach Spanish talent, accelerating the issue, and an increasing number of traditional companies are also expanding their tech teams.
In Riyadh, 84 percent of founders said that access to managerial talent was a major or severe obstacle, as shown in the graph below. Finding C-level managers is particularly difficult, since the ecosystem is relatively young and there are few professionals with sufficient expertise and experience for senior roles.
4. How can founders gauge their impact on the development of ecosystems? Benchmarking founders’ Multiplier Effects to other markets shows the relative maturity of an ecosystem.
The map below presents the multiplier scores of mentorship, angel investment, employee spinouts, and serial entrepreneurship in six climate tech hubs. These indicators show the relative strengths and weaknesses of their entrepreneurship networks. San Francisco had the highest multiplier scores, as the most mature ecosystem in the group. Berlin exhibits a less mature ecosystem, but it excels in other dimensions. Berlin has above average dynamism in terms of the number of companies founded in the last five years, as well as a higher than average proportion of companies with at least one female founder.
5. Where can founders look to develop their network? Connections across regions help founders build networks, but are often underrecognized.
Endeavor Insight tracked more than 300 interregional connections, including mentorship, employee spinouts, and investment that exist between Spain’s geographic areas. As the graph illustrates, there are more than 100 connections between Madrid and other hubs, and more than 80 between Catalonia and other hubs. When looking at the net impact of specific regions, Madrid and the Basque Country provide more connections than they receive — largely via VCs such as Seaya Ventures (Madrid) and All Iron Ventures (Basque Country), while Andalusia and Valencia absorb more support from other regions than they provide.
6. How can founders in emerging markets increase their likelihood of scaling a company? Innovation can come from anywhere in the world, but companies are more likely to scale when connected to global hubs.
Founders in rising and emerging markets are developing customer-centric and low-resource solutions, but they often rely on resources from more established climate tech hubs to scale. Endeavor Insight found that if at least one founder of a climate tech company previously studied or worked in one of the hubs before launching their company, they had a better chance of growing to 100 or more employees. The same pattern holds true for activities after they launch their company — those who receive investment or mentorship from global hubs are more likely to scale than those who do not have such connections. Certain hubs offer specific resources. Climate tech companies from the rising markets that received investment from New York or whose founders studied in the Bay Area were more likely to scale than those that had the same types of connections from other hubs.
7. Where are the next generation of climate tech entrepreneurs coming from? London is the training ground for the world’s climate tech founders.
Endeavor Insight’s new research that traces the global connections between tech hubs revealed that London is a net exporter of education and employment for founders of climate tech companies based elsewhere. As the Sankey graph below illustrates, entrepreneurs who started companies in other hubs often study in the Greater London area as part of their pre-launch academic experience.
8. What experiences can prepare founders for success? Founders of top-performing companies often have specialized professional experience.
Top clean energy companies were more likely to have at least one founder who worked at a major corporation, compared to less successful companies. They were also more likely to have prior experience in a finance or accounting position. Other important traits found among top performers differed by business model. The highest-scaling invention-based enterprises were more likely to have founders with experience in a STEM or product design role.
9. What can support organizations do to help founders scale? They should address the mismatch between program offerings and the needs of entrepreneurs.
Most support organizations in sub-Saharan Africa and India for healthcare companies focus on earlier stages, while relatively few assist with growth and expansion, despite a large majority of entrepreneurial healthcare companies being at the growth or expansion stage. This mismatch was observed in nearly every market and sector that Endeavor studied in 2022. Additionally, several founders reported that support programs are more helpful when they provide tailored coaching as opposed to generic advice or classroom-style talks.
10. What can founders do to build self-propelling ecosystems? Focus on local development and reinvestment.
Local and returnee founders (those who have had educational or professional experience abroad) who pay it forward are crucial to building a self-propelling ecosystem. Hundreds of interviews conducted by Endeavor Insight showed that local entrepreneurs are more aware of the context-specific needs of their customers and tend to have more connections to other local institutions, which improves the growth of the ecosystem.
Returnee- and local-led companies absorb the majority of resources in innovative sectors in India, but expatriate-led companies absorb the majority in sub-Saharan Africa. In cases where expat founders dominate the local entrepreneurial community, decision makers should encourage expats to contribute to local capacity building through steps such as being angel investors or supporting workforce development in the local market.
For more findings like these, read our reports at endeavor.org/research.
Leah D. Barto is the Senior Director of Research and Marine Fujisawa is the Research Associate at Endeavor Insight, the research division of Endeavor that provides data-driven analysis and visualizations showing what makes entrepreneurial ecosystems thrive.
- “Mapping the Riyadh Tech Sector: A Network Analysis of the Entrepreneurship Community”
- “Scaling Climate tech: A Global Study of Entrepreneurs and Networks”
- “Mapping Spain’s Tech Sector: A Network Analysis of the Entrepreneurship Community”
- “Innovation and Entrepreneurship in Clean Energy: The Impact of Successful Founders and How Decision Makers Can Support Them”
- “Innovation and Entrepreneurship in Healthcare: The Impact of Successful Founders and How Decision Makers Can Support Them”
- “Self-Propelling Ecosystem Development: Six Principles for Supporting and Funding High-Impact Entrepreneurs”