The tech giants that now inspire founders from around the world once started out as unicorn startups. They are now technology visionaries and trendsetters.
Maksym Babych
It once seemed impossible to build a billion-dollar company, but in fact, there are now approximately 266 unicorns that are recognised as market leaders, but how can you become one of them?
The startup journey
Many startups begin with a new and groundbreaking business idea, which then needs to be validated before it is further developed. During the start-up process, there are usually many improvements and adjustments that need to be made from minor issues to global business decisions before you begin to develop a Minimal Valuable Product (MVP).
When you have a product that you believe can have an impact on the market, it is then time to begin raising funds to develop it further. Below are some fundraising stages a unicorn company will advance through:
- Pre-seed or Seed stage - at this stage you need a powerful pitch deck. If you have a viable concept you can raise the money to begin building your MVP.
- Series A - It is time to upscale your business to reach new markets and optimize processes.
- Series B - It is time to upscale your business further, growing your team, sales and marketing.
- Series C - Another capital raising round is needed at this stage to scale your business into global markets.
It might appear an easy process from the outside but behind the scenes, there are many hurdles that companies have to face before they achieve success. They must take on competitors, find the ideal conditions and products for their customers and then create a successful team.
Unicorn startups’ pattern
The key to achieving a unicorn is to first create a product of value that is different from the solutions currently available on the market. Maybe the design is more user-friendly than your competitors, the workflow is smoother or you have created a visionary way for people to monetise their content.
When it comes to building a unicorn there is no guaranteed formula that leads to success, but here are a few tips that might help:
- Allow your product to evolve and if necessary change direction as it is important to be able to respond to market changes. Your unique selling point may go on to become a common thing for the big players in the future. In this case, your USP will be lost and that is why it is important to continually scale your company to be able to adapt to internal and external evolution. The inability to do so can lead to your own failure.
- Recognise your weaknesses. Sometimes a change of direction does not work or your product is no longer attractive to the market. It may also be that your idea is unlikely to become a unicorn. When you learn to identify both minor and major failings then you will be able to overcome them faster. It will help you save both time and money that can be spent on more useful developments.
- Focus on your customers. Before you actually reach a “one-size-fits-all” stage, it is important to first focus on a particular target audience, for three main reasons: you have a 60-70% probability to make sales to your current customers, 50% of these customers will be ready to try your new products and crucially 31% of your existing customers will spend more, than new customers due to their existing loyalty. That is why it does not make sense to focus on acquiring new groups.
How to become a unicorn startup?- Requirements to become a unicorn
The process of building a unicorn company differs significantly from that of a Fortune 500 company. There are only two requirements, that differentiate a unicorn:
- Your product has a high impact on a customer’s life. It changes customer behaviour and can improve their lifestyle. Uber is a good example of such a company.
- Your product is a revenue-generated model from inception. It needs to reduce costs on the one hand and generate enough value on the other. In the case of Uber, their service saves time and allows drivers to generate cash.
And these are the reasons why unicorns become what they are. Uber is more than just a taxi application. It is a phenomenon that changed our view of how a transport service should work.
Uber’s rapid growth from a startup company to a unicorn was achieved by constantly analysing market solutions and providing customers with new high-level options to choose from which allows them to remain at the top of their game.
- Market potential analysis
It is believed that one billion dollars is the ideal market value size to launch a startup. Why? Because this amount indicates that there are enough customers in the market but there is also room for a new player and the potential to scale the business.
Whether you are an established business or a new entry to the market you need to ensure that your product has enough potential to be influential in a unicorn marketplace.
The main point of market analysis is to ensure your product has market-fit in a large enough market and also that it is attractive enough to encourage customers to pay a premium price on a regular basis.
- Wait for explosive results 10 times growth over three years indicates the potential to reach a billion $ valuation.
- Obsess over results. Do whatever is necessary, literally whatever, to hit the top numbers and become number one. If necessary, write new rules and break the common ones.
- Continue do unicorn staff until it stops work. As I said previously, if you grow, that means people like what you are doing so continue to do it. Nothing changes except the size of your customer base.
To help you to find your unicorn idea and launch into that market we have prepared market research based on Capterra. There you can find 718 different industries and a number of these may be your potential competitors. Find your industry to become game-changer!View market research based on Capterra
Guidance to startup unicorn project
The job of any startup is to find a solution to a problem that customers want to solve. Let us see how this can be done:
- Identify the problem. For example, let us say that the environment is deteriorating.
- Consider the problem. People drive vehicles short distances.
- Reverse the problem. Try to discourage people from using vehicles in this manner.
- How do we achieve this? Help people to move short distances in a more environmentally friendly way.
- Find the solution. Create a free rental service for electrical bicycles.
- Add value. By providing cheap and ecological rent stations with electric bicycles. The battery charges up whilst on the move and subsequently can be used to charge street lights.
- Create a user journey. Visualize and note how the process will work including the following steps:. Where will people find stations? How will this application look? Note what every piece of equipment does. How is the battery charged? Are there ride limits? How will customers connect a battery to street lighting?
- Validate your idea. Use questionnaires and your paper prototypes to obtain feedback from your target audience. Question bicycle riders, people who drive short distances and investigate legal requirements relevant to the town or city. You need to speak and get feedback from at least ten people.
- How much is this likely to cost? Calculate your costs which should include the following factors: Building the bicycle rental station, cost of bicycles, development of the project and cost of replacing or recharging the batteries etc.
Summary
The rise of unicorn startups leads to the creation of a new startup-oriented economy. Uber and Airbnb were the first players with this idea. As a startup founder, you have all the opportunities to attain the same level of success by following their example.
