COLOGNE, Germany, June 23, 2021 /PRNewswire/ -- A recent study, conducted between February and April 2021, by Prof. Dr. Kai Buehler from the RFH – University of Applied Sciences, Cologne was able to show that the 4T Scoring Model (Team, Traction, Tech&Product, Timing) is suitable to identify successful startups. The study showed that there is a positive correlation between the 4T Score and growth in company value.
In other words: the higher the 4T Score, the greater the possibility of the startup to succeed.
The 4T Scoring Model looks at the four important growth categories for startups: Team, Timing, Tech & Product and Traction. All T-categories correlate positively with startup success, but Timing and Traction ("scrappiness") are the strongest growth drivers. Startups with 4T Scores over 70 have a 20% higher company growth rate compared to the overall average.
A first study was conducted in 2019 with support from KölnBusiness Economic Development Agency and the Cologne Chamber of Commerce and Industry, asking over 120 tech startups in Germany to rate themselves with the 4T Scoring Model. The empirical survey was able to show that startups with a higher 4T Score achieve better business performance, measured by the company valuation. The results of the second survey, conducted from February to April 2021, with 115 startups from the US, Europe and China confirm the validity of the 4T Scoring Model in an international context as well.
Says Prof. Dr. Kai Buehler, "I am very pleased that the results confirm our 4T Scoring Model. Startups can now get their 4T Score for free at www.4TStartupScore.com and get actionable insights on how to improve specific business areas."
KölnBusiness Economic Development Agency and the Cologne Chamber of Industry and Commerce (IHK Köln) offer free coaching and mentoring for startups. Startups can take the 4T test free of charge at www.4TStartupScore.com and use it as a basis for discussions with investors and mentors such as KölnBusiness Economic Development Agency and IHK Köln.
"The RFH study supports our mission to build strong startups in a founder-centric ecosystem," said Alexander Hoeckle, MD of international and business development at Chamber of Commerce and Industry Cologne. "With the help of the scientifically-proven 4T Score, we can prepare founders for financing discussions with an even more targeted approach."
Dr. Manfred Janssen, MD of KölnBusiness Economic Development Agency: "Cologne provides a strong and supportive environment for startups to grow successfully. In this process, the 4T scoring model is a helpful tool and highlights a strength of Cologne as business location: Here, science and businesses support each other and work together to provide future-oriented solutions."
Four equally weighted evaluation categories, each with five response categories, serve as the basis for the startups' 4T Score (scores between 1 and 100):
1. Team - "Who is doing it?" Assessment of the founding team based on various characteristics (such as "team diversity," "industry knowledge," "founding experience").
2. Timing - "Why will they be successful?" Consideration of market growth, the onset of virality through referrals, and competitor analysis.
3. Tech & Product - "How are they doing it?" Evaluation of the company's strategy, business model, as well as addressing unmet customer needs.
4. Traction - "What have they accomplished?" To what extent is the startup able to creatively realize business goals with limited resources and become the market leader in a specific market ("scrappiness")?
The 4T Score was correlated with the increase in company value during the last 6 months. The result was a positive correlation (r=0.5), which confirms the assumption that the 4T Scoring Model is suitable for predicting the likelihood of startup success.
With the 4T Scoring Model, investors receive an assessment tool to better gauge the likelihood of a startup to succeed; Startups can receive their individual 4T Score for free by going to www.4TStartupScore.com