How does a startup become an unicorn?

For startups, the term “unicorn” is a badge of pride. A unicorn in the venture capital sector is any startup with a valuation of $1 billion or more. Therefore, only a company can earn the “unicorn” designation.

Cowboy Ventures founder Aileen Lee coined the phrase when she referred to the 39 startups with a valuation of more than $1 billion as unicorns. The term was created to stress the rarity of such ventures. The definition of a unicorn startup has not changed since then. The number of unicorns, on the other hand, has increased.

While becoming a unicorn is not impossible, it can be incredibly difficult. In actuality, a company has a 0.00006 percent chance of becoming a unicorn, and maturing into a unicorn takes an average of seven years.

Thousands of new firms are created each year, but the great majority fail, and only a small percentage of those that do go on to become full-fledged unicorns. Let’s look at what these unicorns have in common and how you might imitate them to boost the chances of your firm.

The year of the unicorn 2021 2021 is unquestionably the year of “Unicorns.” On November 29, 2021, finance business Slice became a unicorn, bringing the country’s total number of unicorns to 41.

The number of active unicorns is more than 124 percent higher than the 33 active unicorns who joined the privileged club between 2011 and 2020. And we still have one month to bid farewell to 2021.

The first unicorns have appeared in the health tech, social commerce, and e-pharmacy sectors. Thus far, 80 Indian firms have become members of the unicorn club.

At this rate, India will have over 100 unicorns by the end of 2022, well above the earlier forecast of 2023.

Causing Disruption

Disruption is advantageous in business, especially for aspiring unicorns. A disruption in an industry is described as an invention that has a major impact on how that industry or market operates. Disruptors often start at the bottom of the market, providing simpler, lower-cost solutions that meet the same needs as higher-end items.

These products grow more desirable to consumers as they become more affordable, and the company progressively climbs up the market, maybe even taking it over.

To withstand disruption, startups must develop original, one-of-a-kind solutions that deviate from the standard.

A startup must implement fresh creative approaches and concepts to create disruption. And come up with answers that are distinct from the norm.

Take Ola as an example; it has revolutionized the concept of how people commute, which is disruption.

Unicorns are Customer-focused

Nearly 60% of the world’s unicorns have a B2C (business-to-consumer) business system, which means their business strategy revolves around selling low-cost goods and services to the general public. To design items that people want, you must first figure out how to make a specific target audience’s life better.

Most unicorn firms start small and supply something that eventually transforms the way people consume that product, making it a necessity.

Tech-savvy

Another thing all unicorns have in common is a technology-based business approach. How they use and leverage technology to its best capacity. According to one recent survey, 87 percent of unicorn products are software, 7% are hardware, and 6% are other products and services.

Cloud computing and Customer Relationship Management (CRM) solutions are being exploited to their full potential in order to expand the firm.

AI developments have made it one of the most versatile enterprise technologies accessible. Among other things, AI can be used to automate operations, provide individualized user experiences, and improve customer service.

Driven by expansion

Companies that become unicorns have a defined aim and path to success. These unicorn companies grew by verifying their marketing and sales channels through local testing and then swiftly replicating the successful approaches in other regions, all with a clear objective in mind.

To scale a company like a unicorn, well-defined growth targets, and a company vision, or possibly an MTP, should be formed. Develop a scaling strategy by identifying potential sales channels and tracking important performance indicators.

The bottom fact is that a firm scales only when there is enough revenue created, which occurs only when the startup’s service assists and changes people’s lives. They will not purchase something that does not benefit them in any manner.

As we all know, growth does not happen quickly; it takes time, perseverance, and a lot of hard effort. Even the fastest-growing companies may need multiple rounds of funding before reaching unicorn status. In addition, by following in the footsteps of recent unicorn companies and implementing their business-growth and management guidance.