Home Business Entrepreneurs in London are likely to fail, according to global study

Entrepreneurs in London are likely to fail, according to global study

by jcp

Crowdfunding has made it more accessible than ever for the public to raise investment for businesses. Some of the most well-known projects began their journey through a crowdfunding platform, including Exploding Kittens, Brewdog, and Soylent; showing that the power of people can be enough to get an idea off the ground.

Intrigued to discover where business ideas are most likely to thrive and fail, money.co.uk analysed Kickstarter campaigns between 2016 and 2021 in capital cities around the world. They considered criteria of success or failure rates, number of backers and amount raised, to rank each city with a final success score out of ten.

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The results (bottom 10)

  Capital city (country) Success rate score (/10) Median number of backers score (/10) Median amount raised score (/10) Final score (/10)
1 Mexico City (Mexico) 4.9 0 0 1.6
2 London (United Kingdom) 6.4 0.4 1.3 2.7
3 Dublin (Ireland) 5.1 2.6 0.8 2.9
4 Washington DC (United States) 5.6 1.7 2.1 3.2
5 Brussels (Belgium) 5.6 0.4 3.9 3.3
6 Madrid (Spain) 5.3 4.3 1.7 3.8
=7 Copenhagen (Denmark) 6.5 1.7 3.4 3.9
=7 Berlin (Germany) 5.9 1.3 4.3 3.9
8 Singapore (Singapore) 6.2 2.6 3 4
=9 Vienna (Austria) 4.7 3.4 5.2 4.5
=9 Canberra (Australia) 7.7 5.2 0.4 4.5
10 Rome (Italy) 3.9 5.2 5.6 4.9

For the complete data of the 25 cities analysed, please see here.

#2 London:

Ranking second from the bottom is London with a disappointing score of 2.7 out of 10. The UK capital scored just 6.4 for campaign success rates, meaning just less than half of the campaigns were unsuccessful. They also were only awarded a score of 0.4 for the median number of backers, and only slightly better with the median amount of money raised, with a score of 1.3, making this the second worst city in the world to launch a campaign.

The results (top 10)

  Capital city (country) Success rate score (/10) Median number of backers score (/10) Median amount raised score (/10) Final score (/10)
1 Taipei (Taiwan) 8.4 9.5 10 9.3
2 Warsaw (Poland) 7.2 10 9.5 8.9
3 Seoul (South Korea) 6.9 8.7 9.1 8.2
4 Kyiv (Ukraine) 6.3 9.1 8.2 7.9
5 Hong Kong (Hong Kong) 7.6 7.8 7.8 7.7
6 Stockholm (Sweden) 6.1 8.2 7.3 7.2
7 Zurich (Switzerland) 4.7 7.3 8.7 6.9
8 Tokyo (Japan) 6.6 6.9 6.5 6.6
9 Amsterdam (Netherlands) 5.3 6 6.9 6.1
10 Oslo (Norway) 5.1 4.7 6.0 5.3

For the complete data of the 25 cities analysed, please see here.

#1 Taipei:

Taipei leads the rankings as the capital city with the most successful Kickstarter campaigns, with a ranking of 9.3 out of 10. To achieve this score, the Taiwanese capital was awarded 8.4 out of 10 for the success rate of campaigns (84% of ideas were successful) and raised $12.4million by backers, making this the best city in the world to launch a campaign.

Salman Haqqi, a spokesperson from money.co.uk offered guidance on using crowdfunding to generate investment for your business idea:

  1. Target your message: Every good marketing campaign has a targeted message. In order for your crowdfunding campaign to work, it needs to be targeted to a specific audience. Identify who your idea will appeal to best and ensure that the advertising copy speaks to their particular want or need.
  2. Build a community before crowdfunding: Before you launch your campaign, it’s crucial that you have some existing contacts interested in your product, which can be done through an email campaign, social media, or surveys to get your message across before you get the ball rolling. People will be more inclined to back your product if there’s already some existing interest.
  3. Look what’s out there: Research into existing crowdfunding campaigns to get an eye for what is needed for a successful campaign. Have you got a video of your product or a clear reason why people would want to back it? Have you looked at competitors to see how they are selling their products? Research is key to success.
  4. Plan beforehand: Studies show that running a full-time crowdfunding campaign will take from three to six months of planning, coordination and execution. It is essential that you plan effectively to give your project the optimum chance of success.

Methodology

  1. Money.co.uk performed research into Kickstarter to find out which cities have the most successful business ideas.
  2. Data was collected on Kickstarter campaigns each month from 2016-to 2021, taking into account location, category, amount pledged and success/fail rates. Active Kickstarter campaigns were excluded as they were still ongoing.
  3. Large cities such as London and New York have many different identifiers for different districts and boroughs, so these were collected under the same name. This was done by aggregating the raw data.
  4. For each unique city, the following stats were extracted: number of successful Kickstarter campaigns, total number of Kickstarter campaigns, and the success rate.
  5. Then, for successful Kickstarter campaigns only in each city: total backers of all projects, median number of backers per project, total amount pledged for all projects (in $USD), and median amount pledged per project (in $USD) were collected. This was also done for each unique category to find in which sector campaigns are the most successful.
  6. For all cities analysed, each criteria considered was percent ranked out of ten, and an average final score out of ten was generated. Cities were ranked according to their final score out of ten.
  7. All currency conversions were performed through Google Finance, providing live updates.
  8. The above data is correct as of March, 2022 and is subject to change.

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