Compass - A company on a mission to radically improve the success rate of businesses
Compass – Maximizing Business Success by providing dynamic benchmarking via 30+ data sources startups to CEOs, CFOs and Founders to identify problems, set and prioritize objectives, allocate resources and control results
Bjoern and his team are working hard in an open space office in the heart of Silicon Valley. Bjoern’s ambitions and vision are grand.
Bjoern hails from a very small village at the bottom of Alps, where he learned about entrepreneurship early in his life, but didn't know about the term Entrepreneur until later in his career. He founded and led 5 for and non-profit ventures in Germany, Bangladesh & the US. He started working in organizational development, helping companies’ scale up or scale down, based on their needs. His curiosity led him to Bangladesh, where he started ‘Transparency for Development’ based on the premise of increasing productivity of small businesses by helping hands on and providing transparency around local business practices, business etiquette and financing options. He also played a key role as a Marketing Executive of a marketing firm in Russia.
YourStory catches up with Bjoern in his office, while he was taking break from working on Compass.
What inspires you the most and how did you decide to start Compass?
My "leitmotif" is "unleashing human potential." I like to see people grow and I want to work on things that I believe would help people reach their full potential. Compass grew out of the desire of helping founders to live up to their full potential by tackling the core root of startup failure, which can be summarized as "businesses efficiently executing the unnecessary.”
The most effective remedy we found after trying a few different approaches is by simply providing reference points to metrics. As a result of having benchmark data, a company could identify whether the current user metrics such as activation, retention and churn speak for a product that people love or whether they'd have to spend more time on iterating on the product before spending a lot of money and time on customer acquisition.
Benchmark data is nothing new. Large Corporations gain a significant unfair competitive advantage over their smaller peers by obtaining benchmarking information for their decision making. Such information is too expensive for small and medium sized firms. Consulting organizations such as McKinsey or Gartner, Sirius Decisions or Dun & Bradstreet etc. are providers of benchmarking data that is collected, compiled, analyzed and presented manually.
We want to decrease the massive failure rate of businesses by transforming the business world from gut driven to data driven
What do you think is the biggest challenge for startups?
The biggest challenge for any startup is uncertainty – in terms of what’s the product-market fit, who is the customer, what is the right price for the product, how should I position my product in the market and how much money should I raise etc.
Companies that don't effectively reduce that uncertainty tend to do something we call premature scaling. An example for that would be hiring too many people, over-engineering the product, spending too much money acquiring customers etc.
The best way of reducing that uncertainty is to learn as fast as much as possible by talking to your customers and by controlling your metrics in comparison to similar companies.
When you benchmark Compass against its peers in your database, what did you find?
This was one of the first things that we did is to apply our product to our own company. We found that we are doing great in terms of growth compared to similar companies in the B2B space. However, we didn’t have the best retention rate. It was a great insight to have, and when we dug deeper, we found that the first version of Compass was a product that people would use once every 3 to 12 months if they didn't forget about us by then. We addressed that issue by automating the data collection to reduce friction when using the product and to update the benchmarks more frequently.
You are part of many entrepreneurial communities across the world. Do you think networks such as Sandbox Community help in accelerating entrepreneurial ecosystems?
I believe formal and informal networks are crucial for an ecosystem to function. They provide a trust proxy and reduce transaction cost - if I'd say it purely economic terms. Sandbox is a great global family of almost 1000 hand picked change makers in various sectors. They have been a great support for me in the past years.
What do you think are the necessary ingredients for any startup hub across the world to become a successful entrepreneurial hub?
There are evolutionary and developmental factors that are required to make a thriving entrepreneurial ecosystem anywhere in the world. The evolutionary factors are hard to change, because they depend on a given socioeconomic and cultural disposition of an ecosystem. From developmental perspective, I believe there are 2 major ingredients: talent and capital. In order for an ecosystem to maximize their success, they must attract the best possible talent from around the world. Policy makers can influence that by for example adjusting visa regulations.
Based on your extensive experience in education, what do you think about what is the right age for an individual to be exposed to entrepreneurship?
I think that people should be exposed to the possibility of entrepreneurship at the youngest age possible. When the time comes, they can make a choice whether they want to pursue entrepreneurship now, later in their life or never.
I was born in an area where there is very little tech entrepreneurship. My family was fairly entrepreneurial though. I experienced the most radical shift in my perspective towards entrepreneurship when I came to Silicon Valley and for the first time I even considered working on a business that may eventually turn into a billion dollar company.
So people should be exposed to the idea and then they should be allowed to make their own decision.
What’s next for Compass?
The immediate next steps will be some new functionality planned including:
- More industry specific benchmarks, such as the average shopping cart size for e-commerce or DAU/MAU for games
- High resolution benchmarks that allow filtering on aspects such as customer acquisition cost for different acquisition channels and geographies
- The addition of another 100 or so data sources
In the mid to long term, our goal is to expand from tech businesses to restaurants and retail as the next two industries.
If you want to benchmark your startup against similar companies, head over to Compass and use it to find where do you stand.