The Most Used Business Models In The European Startup Ecosystem
According to the European Startup Monitor (2016), the most used business models in the European ecosystem are IT/software development, followed by SaaS and Industrial technology/production/hardware. The greatest challenge is related to sales and customer acquisition.
An overview of the European startup ecosystem
As reported by the European Startup Monitor:
To provide an overview of the industries in which the startups are operating, the respondents were asked to match their startup to one of eighteen industry categories. The results indicate the relevance of the digital economy for innovative European startups; the digital economy accounts for five of the seven major categories. Most startups stated that their venture belongs to the IT/software development sector (15.0%) followed by software as a service (12.2%) and industrial technology/production/ hardware (8.3%) . The most frequent categories on the level of individual countries are IT/ software development (8 countries) and software as a service (8 countries).
What is the most popular business model for European Startups?
Most Popular Business Models of European Startups (2016)
IT/software development
15%
Software as a Service (SaaS)
12.2%
Industrial technology/production/hardware
8.3%
Consumer mobile/web application
6.8%
E-commerce
6.6%
Bio-, nano-, and medical technology
5.8%
Finance/finance technology (FinTech)
5.2%
Online marketplace
4.9%
Education
4.8%
Consulting company/agency
4.6%
Online service portal
4.2%
Green technology
4.0%
Food
3.4%
Media and creative industries
3.3%
Games
1.3%
Offline services
1.3%
Stationary wholesale and retail
0.6%
Other
7.9%
What is the prevailing business model for each country?
Prevailing business model by country
Austria
SaaS
Belgium: SaaS
SaaS
Cyprus
Industrial technology/production/hardware, Consumer mobile/web application
Finland: SaaS
SaaS
France
Consumer mobile/web application; IT/software development
Germany
IT/software development
Greece
Industrial technology/production/hardware
Hungary
IT/software development
Ireland
SaaS
Israel
IT/software development; SaaS
Italy
IT/software development
Netherlands
Other categories
Poland
IT/software development; SaaS
Portugal
IT/software development
Slovenia
IT/software development
Spain
SaaS
Switzerland
Finance technology (FinTech)
United Kingdom
e-commerce
Other EU countries
SaaS
What is the major challenge?
Greatest challenges for European Startups
Other
0.8 %
Team development
3.1 %
Acquisition of staff
5.6 %
Processes/internal organization
5.7 %
Profitability
5.7 %
Internationalization
6.3 %
Cashflow/liquidity
7.6 %
Raising of capital
12.1 %
Growth
16.6 %
Product development
17.1 %
Sales/customer acquisition
19.5 %
Sales and customer acquisition is the biggest challenge European startups have. As pointed out many times over on this blog, sales and distributions are among the most challenging part for any startup. At the same time, it is also the reason why many startups fail and many others do not succeed.
Reference for the data: European Startup Monitor
Resources for your business:
What Is a Business Model? 30 Successful Types of Business Models You Need to Know
What Is a Business Model Canvas? Business Model Canvas Explained
Marketing vs. Sales: How to Use Sales Processes to Grow Your Business
What Is a Value Proposition? Value Proposition Canvas Explained
What Is Business Development? The Complete Guide To Business Development
Handpicked case studies:
The Power of Google Business Model in a Nutshell
How Does Google Make Money? It’s Not Just Advertising!
How Does DuckDuckGo Make Money? DuckDuckGo Business Model Explained
How Does Twitter Make Money? Twitter Business Model In A Nutshell
How Amazon Makes Money: Amazon Business Model in a Nutshell
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