Can you reach a market share of 35% within 3 years of start up, with profits that are worth the effort?

Research on the PIMS Start-up database has identified that the most important predictor of long term success for a start-up business is its rate of market penetration. Leveraging the data from start-up businesses worldwide, we have developed a logistic regression model that evaluates the probability of a start-up achieving a target market share in a given timeframe, e.g. four years (the market penetration model). The model enables start-ups to assess whether the target market share is over or under optimistic and shape their launch plans and changing resource allocations accordingly.

The factors that quantify the strategic profile of the start-up business’s plan (e.g. the blue line below) and derive the success likelihood are:

The result is a?chart like the following:

We recommend 4 steps to a start-up analysis:

1. Getting the offer right (using PIMS? Customer Value Analysis at launch; also year 2 for second wave innovation)
2. Gauging entry barriers and competitor reaction (PIMS? ROLA from the incumbent’s perspective)
3. Likely market penetration (PIMS? start-up model)
4. Profit projection at maturity (PIMS? PAR model in year 4 given likely market penetration and second wave innovation).