You've probably heard of Dropbox. Or Farfetch. Or Uber. Of course. These are some companies called ‘unicorns’.
Whoever is inserted in the world of startups and entrepreneurship, is certainly familiar with this term. However, for those unfamiliar, the term 'unicorn' - coined in 2013 by venture capitalist Aileen Lee - does not refer to the mystical animal in fairy tales, although this analogy was due to the rarity with which the so-called 'unicorns' arose. In fact, it is used to define technology startups that are valued at more than $ 1 billion, based on their long-term market potential.
Any startup aspires to reach this level. Some of the biggest companies we know today started out as ‘garage’ startups and now worth billions. Facebook is one such case.
A talented team is needed to cope with the failure rate of startups and successfully face the challenges of the venture world. However, it is not impossible to reach such a level, and the proof of that is that the ‘rarity’ of unicorns is no longer so rare. When Aileen Lee first spoke about an exclusive group called unicorns, her report only contained 39 companies belonging to that group, and based on the last decade, 4 unicorns were born each year. Today, we see the birth of a unicorn every two business days. There are now more than 500 unicorns worldwide.
So, how to create a unicorn startup? After analyzing 34,371 employee reviews from 831 startups supported by venture capital, Bunch.ai identified which cultural factors drive a startup's success. Here are some tips:
# 1: Never compromise your principles and values
Based on the research carried out by the consultant, it was proved that startups whose team has a strong focus on its principles are 44% more likely to become a unicorn. This may imply, for example, “doing the right thing, even if it costs us short-term success”.
# 2: Don't get lost in the details
Perfectionist entrepreneurs may not like this, but the survey pointed out that startups too focused on details and with the “we take as long as necessary to make the perfect product” mindset were 21% more likely to fail. More than a perfect initial product, startups need to be competitive and respond quickly to certain problems and needs in the market. Later they will be able to adapt and optimize the product, according to the verified needs.
# 3: Focus on results and reduce the chances of failure
From a statistical point of view, the focus on results is the cultural secret of unicorns. Results-oriented companies were 15% more likely to become extremely valuable and 20% less likely to fail.
Thus, the combination of culture/principles with the focus on goals are the main ingredients of the recipe to create a successful company.
Check the unicorn class of 2020 here.
Will your company be the next unicorn? What other aspects would you add to this list?