Startup seems to be the buzzword that's overtaking finance publications these days. Every year, hundreds of thousands of new startup businesses pop up — all of them with the hopes of becoming the next best thing. But in reality, a staggering 90 percent of startups will fail, reports Forbes.
As for what distinguishes a startup with growth potential, Scott Cundill, an internet communications expert who has worked with hundreds of small businesses, said that startups need a proven track record of sales. “Sales do not have to be huge; they simply need to be evident,” he said. “If a startup can show that there are actually users of the product or service, no matter how much in its infancy the product or service may be, that is what sets them apart from the rest."
Business advisors and startup experts say that some of the qualities of a good startup include having a sellable product, a good team and investors who have already vouched for it. Click through to see some of the best startups to watch for in 2016.
1. The Skimm
The Skimm is a daily email newsletter that breaks down the latest news and sends an outline to its users. So if you’re too busy to read about the most important national and international news, The Skimm will deliver all of the major headlines — explained in a friendly and relaxed fashion — directly to your inbox every day.
The company is based in New York and was founded in 2012 by Carly Zakin and Danielle Weisberg. They were associate producers at NBC News and had no business background when they came up with the idea for the startup, according to CNN Money. But 2014 was a big year for the company. That’s when they received $6.25 million in funding to build their news-in-a-nutshell empire.
As of August 2015, they had 1.5 million subscribers, according to the Nieman Foundation. The Skimm also generates revenue through sponsorships from the NBA and Turner Sports. Perhaps best of all: It’s fun, and Oprah Winfrey and Reese Witherspoon have both endorsed it, according to The New York Times.
Founded in 2010 in Washington, D.C., Fundrise is a real estate crowdfunding site with a mission to revolutionize the way people invest in real estate. Fundrise gives you access to investment opportunities from the best real estate companies in the country — all through a simple, transparent platform.
The site requires a minimum investment of $1,000, at approximately one-tenth the average fees of similar traditional channels, said CEO Ben Miller, a real estate investor with 15 years of experience in real estate and finance. “We use technology to reduce the costs of operating a traditional real estate investment fund by up to 90 percent, enabling investors to earn better returns,” he added. Fundrise investors earned a weighted average return of 13.1 percent during 2015, according to the website.
The company, which employs 26 people, recently made Forbes FinTech 50 list. The startup funding currently stands at $41 million, from Renren Inc., Camber Creek and others.
Blacklane's mission is to consolidate the availability of independent black car drivers around the world. It aims to offer customers prices that are a fraction of the rates of legacy limousine services and help drivers get new customers from all around the world.
This fast-growing German tech startup operates in 50 countries, more than 180 cities and 400 airports worldwide. It was founded in 2011 in Berlin by Jens Wohltorf, a former Boston Consulting Group consultant, and Frank Steuer, who founded Firstfon Ltd., an international mobile calling platform.
Already a large company with more than 150 employees, Blacklane was also selected as one of Europe's top startups by WIRED UK. Blacklane has raised $22 million from nine investors to date, according to CrunchBase.
4. Care at Hand
Care at Hand, founded in 2011, is a survey platform designed for early detection of dynamic risk factors for hospitalization — including medical and psychosocial warning signs. The platform can help non-medical staff identify at-risk patients. Based in San Francisco and Rockville, Md., the company is headed by Andrey Ostrovsky, a practicing physician and social entrepreneur.
Care at Hand won the Mayo Clinic's first annual THINK BIG challenge in 2015. And a new study showed that its technology can reduce patient readmissions by 39.6 percent and save $2.57 for every $1 invested, according to CrunchBase.
The startup employs up to 10 people and has raised $2 million. The company also recently announced that it has doubled its customer base to include 15 health care providers in 10 states.
Kahuna is a marketing platform based on machine learning technology to help brands better engage with their audience by automatically optimizing the best time, device and channel for messages.
“Basically, brands can focus on the content and copy, and Kahuna ensures a message gets to them in the most engaging way — through push notification, email, in-app messaging, social and Web,” said CEO Adam Marchick, former venture capitalist and member of the early Facebook growth team.
Kahuna was founded in 2012 and, for the first year and a half, Marchick focused on building a system that could understand the user first, then try to engage through messaging. They have hundreds of successful customers, including Tumblr, SeatGeek, Yelp, Hearst and Overstock.
Based in Redwood City, Calif., the company has raised $58 million total, including a $45 million B-round from the likes of Sequoia, Tenaya and SoftTech VC. It currently employs 100 people and is still hiring to keep up with growth.
Traditional commercial real estate is not only fragmented and lacks technology, but it also favors larger deals and tends to neglect small businesses. That’s where TheSquareFoot steps in, helping startups and small businesses navigate the commercial leasing landscape using technology and a tenant-focused business model.
The 2011-launched startup, with offices in Houston and New York City, takes pride in its mission: To leverage technology to make the office search easier and more transparent for small businesses and startups.
CEO and co-founder Jonathan Wasserstrum received an MBA from Columbia University. Prior to founding TheSquareFoot, Wasserstrum advised foreign and domestic clients on more than $3 billion worth of transactions globally at the leading commercial real estate firm, Jones Lang LaSalle. TheSquareFoot raised $2 million in a seed round in 2015.
New York-based online fashion and textile marketplace, Zuvaa, was founded by Kelechi Anyadiegwu. As an African-American woman of Nigerian descent, the founder and CEO grew up with African textiles but found it increasingly difficult to find modern and trendy African-inspired pieces in stores.
Zuvaa provides customers with affordable African-inspired clothing, as well as a community that embraces and engages the customer through meaningful cultural stories about each designer.
The company launched in May 2014 to take on a $15 billion addressable market by 2020 projections, according to TechCabal. It was able to raise $500,000 as equity in 2015.
Another startup based in New York, Dashlane provides users with a simple, secure and consistent way to manage their online identities. The company is tapping into both the B2C and the B2B market.
Experts say the company, founded in 2009, is a trailblazer in the password and identity management industry because of the groundbreaking technological features it has developed — such as an automatic password changer and secure inbox scan. The Dashlane Digital Wallet has also enabled more than $4 billion in e-commerce transactions.
Headed by CEO Emmanuel Schalit, who studied at Harvard Business School and has a PhD in computer science from Université de Toulouse, the team of 70 has raised $30 million to date from Bessemer Venture Partners, FirstMark Capital and Rho Capital Partners.
9. Daily Bits Of
Daily Bits Of launched in January 2014 in Stockholm, Sweden. The startup’s aim is to be a combination of online learning provider, personal brand development platform and content marketing service.
On the B2B side, it provides a platform for experts to build courses that will showcase their knowledge and improve their brand. On the B2C side, users can have courses from experts delivered for free to their email. Daily Bits Of has already partnered with Behavioral Economics Professor at Duke University and popular TED speaker Dan Ariely to deliver a course on hacking human nature for good.
The startup prides itself on its great retention rate. “Seven out of 10 of our users read all the lessons from a course,” said CEO and psychologist Niklas Laninge. “A remarkable 30 percent of our users haven’t taken a break from learning via our platform on a daily basis in more than three months,” he added.
Daily Bits Of raised $300,000 from the STING accelerator, and its currently opening another round of seed investments.
This startup's slogan is “cut the cord” — and it's not referring to cable. uBeam uses ultrasound to send electricity to devices through the air. Inventor and CEO Meredith Perry kept the technology secret for years before she revealed the science behind her invention to The New York Times in 2014. The company was founded in 2011 and is based in Los Angeles.
There are a lot of skeptics who dismiss uBeam as bad science, yet the startup's funding is currently at $23.35 million, with Mark Cuban and Yahoo CEO Marissa Mayer financially backing the idea. Perry, who created the prototype of the wireless charger in 2011, has already been named "the next Elon Musk" by Fortune.
11. Startup Threads
Since startups are so popular, imagine how well a startup that serves startups is doing. Startup Threads saw an underserved market and jumped on it. It provides promotional material for startups — everything from production, warehousing and shipment. The company was founded in 2011 by Frank Denbow, a Carnegie Mellon graduate with a degree in computer science.
Denbow is also a tech education advocate whose aim is to expose K-12 students to computer science through programs such as CampInteractive and the Academy for Software Engineering. Startup Threads raised $40,000 and operates out of Brooklyn, N.Y., and Santiago, Chile.
It seems that the vast majority of startups create digital products. Sensoria, on the other hand, creates a physical product with the help of digital technology.
Using a smart sock infused with comfortable, textile pressure sensors, Sensoria enables runners to monitor foot-landing techniques in real time. The startup is also working on developing proprietary textile sensors, electronics, mobile applications and cloud infrastructure to support a host of smart garment solutions. Other smart wearables developed by this company include a sports bra and T-shirt that measures heart rate.
Its CEO and co-founder, Davide Vigano, is a former Microsoft executive with more than 25 years of sales, marketing and product management experience. The Redmond, Wash.-based startup raised $5.56 million in three rounds from StartCaps ventures and Mind the Seed. Inc. magazine named Sensoria one of the companies to watch for wearable tech innovations.
Gigster is another startup that takes advantage of the gig economy. The platform is designed to help smaller startups and entrepreneurs access a pool of talented freelance developers. It was launched in 2012 by Roger Dickey, a serial entrepreneur and angel investor, and Debo Olaosebikan, who was a doctoral student with Cornell Nanophotonics Group.
The San Francisco-based company raised $12.5 million in total equity. In December 2015, actor-turned-entrepreneur Ashton Kutcher made a personal investment in the company.