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How to create in-demand tech startups...

24 Jul 2013

If managing a hyper-growth tech startup in Silicon Valley is like launching a rocket, then the fuel is a mix of venture capital funding and engineering talent.

According to LinkedIn blogger James Raybould, "the right group of engineers can thrust a startup to a sky-high valuation.

"Which then attracts even more funding and talent – eventually pushing select startups into billion-dollar orbit."

Last year, LinkedIn tested this theory by ranking the 10 Most InDemand Tech Startups based on millions of site interactions among Bay Area engineers on LinkedIn — and the results were foretelling according to Raybould.

Two months after the social networking site published the list, Nicira (#2) was acquired by VMWare for US$1.26bn.

And over the past year, five more companies on the list (Arista, Box, Square, Palantir, and Splunk) have each grown to more than 500 employees, and are valued between $1bn and $5bn.

"Every day, millions of professionals research companies on LinkedIn," Raybould says.

"Last year, we developed the InDemand ranking algorithm to translate billions of those research activities into signals that reveal which companies are most attractive to LinkedIn professionals as places to work.

"To create the 2013 Most InDemand Startups list, we focused only on LinkedIn site activity between 287,000+ Bay Area engineers (and related roles) and companies with fewer than 500 employees."

Among startups, Big Data, Networking & Storage, and Consumer are hot topics says Raybould.

"Building physical products for consumers is on the rise," he says.

"In 2012, none of the startups in the Top 10 sold physical products to consumers.

"This year, two startups made the list which do just that (Jawbone and GoPro), and three more just missed the Top 10 – Nest Labs (#14), Fitbit (#16), and Lytro Inc. (#17).

"Engineers prefer Pre-IPO. Seven startups on our 2013 Top 10 list have been featured in recent IPO “Watch Lists” on both Forbes and Fortune."

LinkedIn top 10 tech startups:

• Cloudera

• Dropbox

• Violin Memory

• Nimble Storage

• Hortonworks

• GoPro

• Jawbone

• Big Switch Networks

• Pinterest

• Nutanix

James Raybould - LinkedIn Blog