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The TechStars Index – Seeking Alpha Among 162 Active Companies

This post is part of the Startup Index Series, featuring data-driven posts about the companies in various portfolios including Y Combinator, 500 Startups and Andreessen Horowitz. Which portfolio would you like to see analyzed next?

TechStars is a seed stage startup accelerator funding companies in Boulder, Boston, Chicago, London, New York City and Seattle. It’s mentor roster features several notable founders and venture capitalists and they self-publish a lot of stats about their companies including active companies, failure rate, funding and employees by class and more. Applications are open now for Seattle and London 2013. Apply here.

Unlike previous indexes, this list factors in several different data points and no longer over-emphasizes web traffic. In order to avoid having these indexes gamed I am not going to reveal the exact formula I use to calculate the ranking, but I can tell you that externally measurable factors like Twitter followers, Facebook likes, page rank, inbound links and even number of employees all play a part in calculating the ranking of these companies.

Founders, if you feel your company is ranking incorrectly, or have feedback for me about how I can make this list better I would love to hear from you. My email is morrilldanielle (at) gmail.

14 Comments

  • Leith Stevens

    I think your straw man about not revealing the index algorithm is a bit silly. I guarantee you these startups have better things to do that game an algorithm… and if your algorithm is accurate, it should be aligned with their success–something each startup is focused on every day.

    • Danielle Morrill

      Thanks Leith, I feel I have good reason not to reveal the exact algorithm right now. You’re right that startups *should* focus on other things, but you’d be surprised how tempting it is for people to game things. This list measures things companies are focused on every day like hiring new people, gaining customers and gaining awareness.

  • Micah

    Danielle, always love your chutzpah at pushing out these lists.

    A couple of questions;

    1) what does a high ranking mean? What’s the qualitative? Why should I care?

    2) some of these companies have been acquired, etc (DailyBurn by IAC for example). does that affect the ranking?

    3) what about company age? Some of these just left the program. SendGrid has been around for a number of years. does that affect the ranking?

    There is also Techstars Cloud in San Antonio, managed by Jason Seats, that’s doing great work.

    Nice work, my friend.

    Micah

    • Danielle Morrill

      A high ranking means that the company is doing well across several indicators including web traffic, company size, inbound links, Facebook likes, Twitter followers, page rank, etc. These are all external indicators of health for a company, and I weight them based several variables to allow the B2B companies to stack up correctly next to consumer ones.

      I didn’t realize DailyBurn was acquired, I will remove them. If you know of others who have been acquired please let me know and I will remove them too. This is for active pre-exit companies.

      Company age is an interesting factor, I think it is in reflecting in things like employee count, inbound links, and social media following. There is not currently a direct measurement of company age being done.

      Keep the feedback coming!

  • Alex Schiff

    This is a fun index, but I hope no one is judging any of these companies (mine included) as better or worse than any of the others based off of it. Facebook likes/Twitter followers matter much more for some companies than others, a high headcount could very well be mismanagement, and the most important factors — users/customers, their growth and engagement, and revenue/profitability — are not being measured at all (and aren’t public anyway).

    I’m curious what your goal is for the purpose of the index? How do you want people to be perceiving what a company’s position means?

    -Alex Schiff
    Fetchnotes, Boston Fall 2012

    • Danielle Morrill

      At this point I am mainly focused on figuring out how much data I can collect and attempting to organize it in a useful way. There are certainly companies who don’t have a strong web presence, but they are in the minority when it comes to investing in “tech startups”.

      I think the most useful thing – which hasn’t been done with the TechStars index yet – is to see the changes in traffic, social reach, pagerank, inbound links, etc. over time. These are signals that a company is either gaining or losing momentum, and I think there are many more pieces of trackable public data that can help us understand how well a business is doing. No single data point swings the entire index, they are combined together and rated based on the type of business. For example a B2B startup with 10,000 Twitter followers is arguably equivalent to a consumer-facing startup with 10x that many.

      Ultimately I think I will refine this to the point where it does strongly indicate which companies are doing well, and my hope is that it will shine a light on companies that don’t necessarily get a ton of buzz but are just quietly killing it and deserve to get recognition.

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