The purpose of this project is to analyze the data of Unicorn Startups and determine patterns of those startups
View the creation process and code here
Created With:
Power BI
Python
Report
Source Data:
Goals
The goal of this project is to analyze the data of unicorn startups and determine patterns of those startups. Specific Questions are listed below.
Questions
1. What cities produced the highest number of Unicorns?
2. What cities are the most successful for startups?
3. What industries produced the highest number of Unicorns?
4. What industries are the most successful for startups?
5. Did certain industries do better in certain cities?
Initial Hypothesis
My initial hypothesis is that San Francisco and New York are going to have both the highest number of startups and the highest success of startups. I also believe that tech-related industries will be the most successful.
Defining Success
For this project, success is going to be determined by the valuation of the startup. Specifically, this project is going to only look at Unicorn companies and their valuation. In summaries, success will be defined by the average startup value. This is calculated by taking the total valuation of all startups in the location/industry and dividing it by the number of startups in that location/industry.
What is a Unicorn?
A unicorn company is a private company with a valuation of over $1 billion. The term was coined to represent the rarity of a successful startup.
Transforming Data
This report will be based on transformed data where cities are replaced with their nearest major city. The data is transformed this way because there may be a lot of startups in cities directly neighboring major cities and should be categorized as part of that city for location analysis.
Defining Major City
The nearest major city is defined by the nearest metro/micropolitan area based on the US 2021 Census data.
What cities are the most successful and produced the highest number of Unicorns?
As expected, San Francisco has the highest number of startups followed by New York and San Jose. San Francisco has ~2x the startups but ~4x the value of New York. This means the average San Francisco startup is much higher in value than the average New York. Another interesting point is that Los Angeles has a little under half as many startups as San Jose but provides an overall higher valuation. The average startup value of Los Angeles is $6.09B which beats the average startup value of both New York ($2.32B) and San Francisco ($4.05B). Both San Francisco and New York sit lower than expected on the list. San Francisco comes in 8th with an average startup value of $4.05B and Yew York comes in 27th with an average startup value of $2.32B. This disproves my initial hypothesis of New York and San Francisco being the most successful cities for startups.
What industries are the most successful and produced the highest number of Unicorns?
Internet Software & Services and Fintech accounted for the largest amount of unicorn startups with 160 and 128 respectively. Likewise, these industries have the highest valuation with Internet Software & Services reaching a total valuation of $470B and Fintech reaching a valuation of $484.6B. However, when we compare the average value per startup, these two industries move down the list. The highest value/startup industry is Travel with a value/startup of $7.25B. However, there is TripActions is the only company making up this valuation. Other is the second-highest category but since this is a combination of all other industries, it is difficult to determine what industry makes this so high.
Surprisingly, Supply Chain, logistics & delivery have an average startup value of $4.24B making it the third-highest value/startup industry. There are 23 startups in this industry to reinforce this data. Fintech sits fourth with a value/startup of $3.79B. Another surprising discovery is that internet software & service only has an average value/startup of $2.94B making it sit in the middle of the list of industries.
My initial hypothesis was that tech-related industries would be the highest value/startup industry. However, based on this report that hypothesis is disproved as many other industries sit higher than tech-related industries.
Did certain industries do better in certain cities?
Based on the report it seems that some cities do indeed have higher value startups in certain industries compared to other cities.
A list of some of the most prevalent findings:
● Cybersecurity succeeds the most in Boston, Minneapolis, and San Jose.
● E-Commerce succeeds the most in Jacksonville, Boston, and San Francisco.
● Health succeeds the most in San Diego, Dallas, and Chicago.
Final Summary
Although my initial hypothesis of the most startups being in New York and San Francisco was correct, the hypothesis that these two cities would have the most successful startups was not. Through the findings of this report, I can conclude that certain industries do succeed more in certain cities. When thinking of a location for basing a startup, one should consider which industry that startup is in.
