The outbreak of the Covid-19 pandemic left the whole world with uncertainty about the future, but soon after a little sparkle and a rainbow, a whole blessing of unicorns became visible. Jonathan Ortmans, founder and president of the Global Entrepreneurship Network, wrote in the 2021 Global Startup Ecosystem Report (GSER) that although the pandemic increased stress in many industries, “it also put the spotlight on entrepreneurs as powerful economic drivers comfortable with uncertainty”. This is evident considering the number of successful startups in the last year.
We do not know about you, but a long-term vision that Specno is working towards is to also become a unicorn and we know that it is within our reach.
A ‘unicorn startup’, in the business world, refers to a privately owned startup company that reached an investor valuation of $1 billion or more. This Silicon Valley household term was first coined in 2013 by the founder of Cowboy Ventures, Aileen Lee, in a TechCrunch article titled “Welcome To The Unicorn Club: Learning from Billion-Dollar Startups”. This metaphor for the mystical creatures was created to refer to the rarity of these startup companies.
Each company previously identified as a unicorn has its own story and timeline, however, the average duration from ‘launch’ to ‘unicorn’ status is seven years. These days it appears that companies are achieving ‘unicorn’ status much faster than before, most likely thanks to digitalisation. In 2021 South Africa delivered its first unicorn startup company, called Go1. Go1 was founded in 2015, which means that it took the startup a brisk six years to reach unicorn status. Below is a list of well-known companies that achieved unicorn status as a startup. The data clearly emphasises each company’s different trajectory to unicorn status.
Time to $1 billion valuation
Pinterest: 2 years, 3 months
Snapchat: 2 years, 3 months
Facebook: 2 years, 7 months
Airbnb: 3 years
Lyft: 3 years
Twitter: 3 years, 7 months
WhatsApp: 4 years
Uber: 4 years, 6 months
Spotify: 5 years, 3 months
LinkedIn: 5 years, 5 months
Hootsuite: 5 years, 10 months
Zomato Media: 7 years
Fitbit: 8 years, 2 months
Shopify: 9 years
GoPro: 9 years, 11 months
Survey Monkey: 12 years
Shazam: 15 years, 2 months
Not too long ago, David Friedberg claimed that there is only a 0.00006% chance of building a company worth more than $1 billion. However, due to the impact of the Covid-19 pandemic, the 2021 Global Startup Ecosystem Report holds that close to 2 000 companies worldwide achieved unicorn status and that the world is currently minting more than two unicorns per day.
The above data indicates that each startup that achieved unicorn status has its own unique success story. Unicorns aren’t born overnight, and although this article is not your one-way ticket to billion-dollar status, it may help to identify key characteristics of these mystical creatures:
Unicorns are innovative disrupters – disruption refers to innovation that radically changes how businesses in a certain industry operate. This can be seen when a company targets a business opportunity that is overlooked by offering more affordable, convenient, and/or simplistic solutions. Uber changed the way that people commuted, and Netflix disrupted the video and DVD industry by offering affordable streaming services.
Unicorns are high on technology – This means that most of the unicorn companies’ business models are driven by technology, which helps them operate with increased efficiency and fewer resources. It also produces better customer experiences and makes usage more affordable. The latest research of CB Insights confirms this technology-driven characteristic, as their research indicates that 20,4% of all unicorns are found in the fintech category, and 17,8% in the internet software and services industry. E-commerce and direct-to-consumer follow with 10,9%, and artificial intelligence with 7,8%. Technology is growing constantly which makes it one of the most important facets to base your business on, otherwise, you will get left behind – and unicorns know this.
Unicorns are focused on consumers - More than 60% of unicorns follow a business-to-consumer (B2C) model. Their goal is to create value for consumers by making their everyday life more affordable, convenient, and simplistic.
Unicorns are focused on growing – Unicorns have clear growth goals and scale their business accordingly. Refer to our previous goal-setting blog to learn more about writing clear goals for your busines.
There is no secret recipe for becoming a unicorn but learning from the above can help you and your company move towards unicorn standards. Tech pioneer, Steve Jobs, once said that “Innovation is the ability to see change as an opportunity – not a threat”. May you be inspired by the opportunities within our changing world and walk in the footsteps of the unicorns before you. Who knows, you might just be the mastermind behind the next billion-dollar creature.
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