How to analyze disruptive startups

When analyzing disruptive startups, we need to first decide whether a startup is disruptive at all.

One way to find good candidates is to look for new medium-to-large funding rounds on Crunchbase.

Then, looking at a new company that just raised around $100M, we should be able to discern: how is this company successful against the incumbents?

Obviously, the mega-round probably implies fast growth. We should be asking these questions:

• Who are the incumbents this startup is taking market share from?
• How is this startup growing so fast?

To answer these questions, we can explore several reasons for this success:

• Is there a technological advantage that the incuments lack?
• Is there a specific marketing technique that is working for them?
• Is this startup serving a certain niche of the market better?

Answering these questions will help us understand and assess whether this growth is short-lived or will probably last for a while (or a long while).

These questions will guide our thinking in analyzing any new interesting funding round.

To answer these questions as confidently as possible (this is hard!) we may consult any of the following sources:

• Youtube videos of/about the startup
• Blogs mentioning the startup
• News articles about the startup
• Any other resources available online about the startup

I welcome your comments.

How do you make such an analysis of a hot growing startup?

Please write to me in the comments, and I will respond.

Thank you.