The startup journey can be an incredibly difficult, yet rewarding, endeavor. With the promise of incredible potential profits and a deep sense of accomplishment, founders strive to turn their startups into ‘unicorns’, i.e. companies worth over one billion dollars. Achieving such a feat requires no shortage of hard work, risk-taking, and creativity; it is certainly not a “piece of cake”.
However, so many entrepreneurs still pursue this goal despite the difficulty as they recognize the rewards that could potentially come out of it. Those who are successful, join the ranks of elite business people and walk away with a huge payday. It may take time and effort, but the risk may prove to be highly worthwhile in the end.
The number of startup unicorns in the world today is inspiring. These companies are valued at over a billion dollars and are shaking up industries, with products and services that will shape the future of technology. Many countries have seen an increase in unicorn startups over the last decade. In China alone, nearly 50% of all unicorns were founded since 2015, while Europe has tripled its unicorn population since 2013. There is evidence that these so-called “unicorns” are making a real impact – whether it’s Uber disrupting transportation or Fintech changing financial services. It’s exciting to see such progress!
What does it take to become a Billion-Dollar Startup Company?
All these founders owning a billion-dollar company today were once at the stage where you are today. So, what really does it take to build a billion-dollar company? Well, we have compiled some common dynamics that lead to making your startup the next successful unicorn!
Founder Dynamics
Founders often look up to founders of unicorn startups to understand what qualities got them this far. By analyzing multiple unicorns, we can determine certain patterns that are often seen. Multiple founder dynamics together add up to making a startup the next unicorn. What are those? Here is what you need to know…
Number of Founders
It can be hard for founders to find a co-founder that resonates with their ideology. However, it is appreciated that founders find co-founders to build their startups the right way. Contrary to popular belief, most unicorns have been built by single founders. This has been proven repeatedly as companies like Facebook and SpaceX predate the startup era of having co-founders. Despite this fact, mentors from the startup world are still encouraging entrepreneurs to find co-founders.
The reason they do this is that it reduces risk. Having co-founders provides assistance during times when you may have doubts or lack clarity in decision-making. Having a partner also encourages accountability and productivity due to working with someone who shares a common goal.
Research suggested that over 20% of unicorns are run by solo founders, over 36% are run by dual founders, and 28% are run by a trio. Thus, although a fair number of unicorns were founded by solo founders, it’s important to realize that having a partner can be beneficial depending on your unique situation.
Background and Expertise
Startups have often been viewed as motors of innovation; new ideas and solutions to existing problems. One way this is seen today is with unicorn startups – those valued at more than one billion dollars. Many of their founders, however, don’t necessarily bring an entirely new perspective to the table. Rather, it is their industry background or expertise and experience which offers them the foundation for success.
Whether that be knowledge or vast networks, or oftentimes both, these founders tend to find an existing problem in their sector and build a solution around it. In this way unicorn founders are providing innovation not through completely novel concepts but through targeted solutions, allowing them to capture a market before competitors and scale rapidly.
This takes us back to the time when Steve Jobs and Steve Woznaik developed their first computer with the help of their interest and know-how of technology. They both studied how Altair worked and later developed a more practical solution in the shape of Apple I.
Another great example here is the founders of Airbnb. Brian Chesky, Nathan Blecharczyk, and Joe Gebbia worked hard to make this company what it is today. But the real game began years back when two among these were exposed to a real problem. Their quest to find a temporary living place as a tourist gave birth to the concept of Airbnb.
Education
Education has traditionally been seen as a contributing factor for success in business, and this also applies to the founders of startups. A careful analysis of the most successful startup founders today reveals that many have attended a university or pursued higher education. This suggests that higher education has become essential for entrepreneurs if they wish to increase the likelihood of success in their business ventures.
Having access to the latest research, trends, and knowledge gives founders the edge when it comes to launching and managing a successful business. Even if formal education is not listed as a requirement by investors when selecting startups for investment, it serves as one additional indicator that can help set an entrepreneur apart in the saturated startup market.
Work Experience
Although there is an aura of overnight success associated with startup unicorns, trends show that this couldn’t be farther from the truth. In most cases, unicorn founders were already associated with the respective industry long before they began their startup journey. Many were working as employees at some of the top companies in their field and had already established a successful business when they decided to venture out on their own.
This proved to be a great asset, allowing them to hit the ground running and quickly establish a product-market fit for their enterprise. Others used their experience and knowledge to gain investor confidence, attract talented team members, and pave the way for a rapid ascent up the corporate ladder. In almost all unicorn startups, it’s clear that having exposure within the industry was key to success.
Popularity and Value Proposition
Rapid popularity often brings in rapid growth for startups, scaling them into unicorns. But what really makes a startup popular? In recent years, value proposition and accessibility have become primary focuses for many startups. However, there is more to gaining consumer trust than just having a unique offering or ease of use.
Brand identity and customer service are also defining factors of success – customers must feel seen, heard, and valued in order to develop not only loyalty but a healthy rapport with the company. As much as having an innovative idea may help spark interest in a startup, providing quality customer service is essential for any business looking to scale into lasting success. Let’s further discuss the success trends of unicorn startups considering their value proposition and popularity.
Painkillers VS Vitamins
These terms may remind you of medicines but here you just need to keep their purpose in mind. Startups don’t just provide any product or service – they must meet a certain level of demand in order to succeed. Unicorns can be divided into two distinct types: those that act as painkillers, eliminating an existing problem, and those that act as vitamins, providing increased value to a pre-existing solution. Whether painkiller or vitamin, it’s clear these startups have carved out their own unique market space – a rarity in the business world – leading to the impressive financial success and visibility enjoyed by unicorns today.
The key for forward-thinking entrepreneurs is determining which type of startup they will build. Founders must be sure of the market pull and how they may adhere to it.
GBF Strategy
GBF, or “get big fast”, is a popular strategy for many startups looking to achieve growth and success. By pursuing aggressive yet targeted expansion strategies, these companies hope to penetrate the market quickly and gain an edge over their competition. GBF encourages startups to focus on areas of high demand, develop relationships with strong partners, and use technology to scale the organization more efficiently. Though this approach can yield results quite quickly, it’s important that startups remain mindful of potential pitfalls such as overextending resources or failing to recognize external market forces. With proper planning and execution, GBF can be an effective way for a startup to expand rapidly while still remaining sustainable in the long-term.
Optimize Value Proposition
Unicorn startups have certainly been a huge success due to their focus on customer needs. By remaining agile and evolving with the times, they are able to assess market trends and launch products accordingly. These companies have also shown great foresight by keeping ahead of the curve and rapidly updating their product lines with features that are necessary and beneficial to customers. This kind of innovation has enabled unicorn startups to grow and become successful even in highly competitive environments.
Apple has been leading the way with its revolutionary products for many years. From the introduction of the original Mac computer to more recent groundbreaking releases such as the iPod and iPhone, Apple has crafted a legacy defined by bold, innovative ideas that pull the entire tech industry forward. During this process, Apple has forever altered how people interact and view technology, disrupting existing markets along the way. There’s no other company quite like it and it stands proudly as an example of what entrepreneurs can accomplish when they are passionate about their products and goals.
Timing
Unicorn startups made it big in the market by launching at just the right time. These companies entered and penetrated within their niche only when there was a strong market pull. Timing has played an important role in the success of startups later making them a unicorn. Let’s see how it worked for them.
Launch Dynamics
Startup companies that preferred to swim in a blue ocean found less competition and faster growth than those who chose a red one. Uber was the first commute app to be launched, exclusive in its niche. This is the reason why it became popular and experienced growth in comparison to others that stepped later in the competition.
In this case, it was the timing and the market pull that made things favorable for Uber to grow.
Another example is Netflix which was launched as the first one of its niche while disrupting the market. It was launched at just the right time when people were struggling with managing and storing collections of DVDs. It was a lot later when others like Disney Plus, HBO Max, and Hulu came into the line. Hence, they had to struggle to make their way into the market. A study suggests that 30% of the time unicorn was first on the market. 30% of the time 2-5th in the market. 40% later than 5th in the market.
Conclusion
Starting up a business is no easy task and requires strong perseverance in whatever way possible. It takes a lot of hard work, long hours, and dedication to get it off the ground and ensure success. Those that have turned their startups into billion-dollar companies often shared some common trends including extensive planning, pivoting, and adapting to market changes, building supportive communities, leveraging technology for growth and development, understanding customer needs, tracking progress carefully, and goal setting effectively.
Having these practices in place can help entrepreneurs steer their businesses toward success by assessing metrics for progress and narrowing in on the most effective strategies for reaching milestones. While it is no small feat to hit the billion dollar mark consistently, with the right processes in place combined with grit and determination any entrepreneur can launch their startup into stratospheric heights of success.
