For many founders, achieving unicorn status is a mere fantasy. In fact, less than two percent of startups reach a billion-dollar valuation. However, an increasing number of tech startup founders have set their sights on this lofty goal.
«Billion-dollar startups were once a myth, but now they are everywhere, backed by a bull market and based on new disruptive digital technologies and business models that make their speed of operation, their pace of innovation and their scope are much greater»says Matthew Griffin, chief innovation officer at Innovation Enterprise.
“You've heard their names, and you're already using their products, and in many cases, they are now the new market leaders.”
In fact, 708 companies belong to this exclusive club, according to CBInsights. Together, these companies represent a total value of 2.3 trillion dollars. Unicorns are found in the United States, China, India, the United Kingdom, Germany, Argentina and South Korea. Until a few years ago, there were only four unicorns!
How do the world's fastest-growing tech companies achieve astronomical growth? Here we explain how you can follow in the footsteps of the most successful technology giants in the world:
Building a unicorn is not like building a typical startup, and it's not like building a typical Fortune 500 company either. To be exceptionally successful as a tech company founder, you must:
Be extraordinarily motivated to create something disruptive.
Prioritize your company's mission, values and culture.
Firmly believe that your product or service will radically improve the lives of users.
Have a revenue-based business model that generates profits from day one.
Although some user-based startups have achieved unicorn status, these companies are few and far between. Uber, Airbnb, and other household names achieved rapid growth by analyzing their target audience, identifying a problem, and deploying a quick solution. Why were consumers so willing to pay these companies? Because their products and services offered an incomparably better way to accomplish common tasks.
Key takeaway: Once you have your radical vision and a profit-driven business model, figure out what it takes to hit the key benchmarks for success.
You probably come up with interesting business ideas all the time. Most founders we know can't go a week without noticing something that could be done better. From outdated software programs and broken restaurant reservation systems to home heating and cooling problems, the best startup founders build businesses that solve family problems. The best ideas emerge from the most obvious everyday problems and obstacles.
However, if your goal is to create a billion-dollar company, a good idea is not enough. Your product or service must also be highly desired by a large segment of the market. According to CB Insights, 42% of startups fail because ““There was no need in the market.”
How do you know if your idea has unicorn-level market potential?
Achieving product-market fit feels effortless. You have tested and fine-tuned your product/service with ease.
There is a lot of expectation around your product/service and consumers are willing to pay a lot of money.
You can manufacture and produce the product/service in volume.
Your product/service serves a large, global market.
You have a winning team of industry-leading experts.
Your product/service is considered “disruptive”. There is no one else who does what you do.
Key takeaway: Unicorns test their assumptions, target large market segments, and look for indicators.
The best investors only invest in the best startups. The investors you most want to partner with will have already made investments within your vertical or space. In most cases, they look for tech startups that have already demonstrated their ability to scale.
After achieving initial traction with paying customers, the key to scaling quickly is securing a loyal base of product users who champion your brand. If you can generate what startup advisor and Inc. contributor Alex Moazed calls “power users,” major investors will come calling.
“This term means something different for each platform,” says Moazed. «For eBay, they were the energy sellers. For Uber, they are drivers who spend 30 or more hours a week on the platform.
Key takeaway: Focus on power users, track financial metrics, and provide documentation that shows you have what it takes to replicate past results on a larger scale.
As your team grows, it's important to scale within a space designed to help tech startups scale.
Many of the world's fastest-growing technology companies harness the power of the ecosystem to achieve astronomical growth. By working alongside other like-minded tech leaders, founders can collaborate and tackle the tech industry's biggest challenges.
Key takeaway: A big part of becoming a unicorn has to do with meeting the right people. Find a tech-focused coworking space that helps you save money, stay connected, and scale faster.
