A unicorn company is a privately held startup company with a current valuation of US$1 billion or more. Once a ‘unicorn’ goes through an IPO or makes an acquisition, it’s no longer considered a ‘unicorn’. Facebook, Alibaba, Twitter and Australia’s Atlassian are excluded for this reason.
There are currently 227 active unicorns, with China’s Ant Financial ($70b in April 2017) and San Francisco-based Uber ($62.5b in April 2017) currently topping the list. No Australian unicorns as yet! During the 2017 calendar year, 57 start-ups around the world attained unicorn status. In 2015 there were 81 new unicorns! Many of these start-ups had at least one female founder, including Outcome Health, SenseTime, VIPKid and Mobike.
Obviously hugely different in their offerings, some common themes shine through as keys to their success. These are valuable takeaways for businesses of all sizes:
1. Build something that customers truly love (not just like) and cannot live without
When people love a product, they will tell all their friends and family and seek to eagerly convert them. This is golden word of mouth. Exhibit A – Uber and AirBNB – what was life like before these? Pay cash for a cab…you’re kidding.
2. Establish a business culture around a strong mission
Make sure every employee or contractor for your business is aligned with your company mission statement and lives and breathes it. The message needs to be loud and clear:
a. WeWork – “Do what you love”
b. Uber – “Transportation as reliable as running water, everywhere for everyone”
c. AirBNB – “Belong Anywhere”
3. Know when it’s time to change direction or pivot
Of course, it’s easier for smaller businesses to be agile and change quickly with no hierarchy stopping decisions being made and easily implemented. Once a business become larger, somehow you need to keep your structure flexible to achieve this. Keep track of your competitors and make sure you’re always one step ahead. Or, if they come out of nowhere with a new idea, be able to pivot a different way to keep them guessing and keep your product or service fresh, different and valuable.
4. Some markets can accommodate more than one disruptive start-up
Lyft came into the market three years after Uber, but is still worth more than $11b and growing quickly. For smaller businesses, don’t scrap your brilliant idea just because someone implemented it first – customers will often welcome a challenger brand.
5. Create something that is valuable to unicorn companies – piggy back!
Create a product or service to enhance communication systems or processes, payment, delivery – anything that makes a unicorn’s business better than it already is. For example, the US’s Symphony Communication Services reached unicorn status on 2017 – it allows seamless communication and sharing of documents between financial services companies (funded by BNP Paribas, Goldman Sachs and Google).
6. Being customer centric is essential – your shopping experience needs to be on point
We all know consumers have ever increasing expectations, our attention spans are becoming shorter and we get frustrated easily. If your website is slow, your shopping experience is clunky, your marketing images are low definition, you aren’t active in the social media space or your updates are out-of-date, if you don’t have a current blog, if your delivery is expensive – any tiny point of friction in the experience, and consumers will move on quickly!
7. The public are supportive of forward-thinking businesses looking to change the world for the better
Millennial and Gen Z support is HUGE for any business that is creating a more sustainable world, improving our daily lives or has a vision to achieve this. The US’s Rubicon Global reached unicorn status in 2017 – it allows business to order rubbish removal from a variety of waste haulers and helps them recycle more – it’s funded by Leo DiCaprio (as well as Goldman Sachs and Promecap) who promotes at the movie award shows!
Each unicorn has its own success story, however the ideas behind these massive companies really look to the fundamentals of a great business – the customer experience and the people who deliver it. The good news is these are areas we can all focus on in our own businesses. Many ‘unicorns’ have challenges with tax too, no doubt a solid business structure and excellent tax advice is also essential!!