For many founders, achieving unicorn status is a mere fantasy. In fact, less than two percent of startups will achieve a billion dollar valuation. However, an increasing number of tech startup founders have set their sights on this lofty benchmark.
"The billion-dollar startup was once the stuff of myth, but now they’re everywhere, backed by a bull-market and founded on new, disruptive digital technologies, and business models which make their speed of operation, rate of innovation, and reach that much greater," says Matthew Griffin, chief innovation officer at Innovation Enterprise. "You’ve heard their names, and you’re already using their products, and in many cases, they are now the new market leaders."
In fact, 226 companies belong to this exclusive club. Together, these companies account for a total value of $738 billion. Unicorns can be found in the United States, China, India, the United Kingdom, Germany, and South Korea. Just nine years ago, there were only four unicorns in existence!
How do the world's fastest-growing tech startups achieve astronomical growth? Here's how you can follow in the footsteps of the world's most successful tech giants:
4 Steps to Becoming a Tech Startup Unicorn
1. Commit to Rapid Growth
Building a unicorn isn't like building a typical startup, and it isn't like building a typical Fortune 500 company either. In order to be exceptionally successful as a tech founder, you must:
- Be extraordinarily driven to create something disruptive.
- Prioritize your company's core mission, values, and culture.
- Firmly believe your product or service will radically improve users' lives.
- Have a revenue-based business model that draws a profit from day one.
While some user-based startups have achieved unicorn status, these companies are few and far between. Uber, Airbnb, and other household names achieved rapid growth by analyzing their target audiences, identifying a problem, and deploying a rapid solution. Why were consumers so eager to pay these companies? Because their products and services provided an incomparably better way of doing common tasks.
Key Takeaway: Once you have your radical vision in place, and a profit-driven business model, figure out what it takes to hit key benchmarks for success.
2. Build the Right Product
You probably come up with interesting business ideas all the time. Most of the founders we know can't go a week without noticing something that could be done better. From out-of-date software programs and broken restaurant reservation systems to household heating and cooling issues, the best startup founders create businesses that solve familiar problems. The best ideas spawn from the most obvious daily struggles and hindrances.
However, if your goal is to build a billion-dollar company, a good idea isn't good enough. Your product or service must also be highly desired by a huge market segment. According to CB Insights, 42 percent of startups fail because there was "no market need."
How do you know if your idea has unicorn-level market potential?
- Achieving product-market fit felt effortless. You've tested and tuned your product/service with ease.
- There's a lot of excitement around your product/service and consumers are willing to pay top dollar.
- You can manufacture and produce the product/service in volume.
- Your product/service serves a large, global market.
- You have a winning team of industry-leading experts.
- Your product/service is considered to be "disruptive." There is no one else doing what you're doing.
Key Takeaway: Unicorns test their assumptions, target large market segments, and look for indicators.
3. Secure the Right Investment
Top investors only invest in top startups. The investors you most want to partner with will have already made investments within your vertical or space. In most instances, they are looking for tech startups who have already proven their ability to scale.
After achieving initial traction with paying customers, the key to scaling quickly is securing a loyal base of product users who champion your brand. If you can generate what startup advisor and Inc. contributor Alex Moazed calls "power users," top investors will be calling.
"This term means something different to each platform," says Moazed. "To eBay, it was power sellers. To Uber, it's drivers spending 30 or more hours per week on the platform."
Key Takeaway: Focus on "power users," track financial metrics, and provide documentation that proves you have what it takes to replicate previous results on a larger scale.
4. Select a Space to Scale
As your team grows, it's important to scale within a space designed to help tech startups scale. RocketSpace is an industry-leading tech ecosystem built to accommodate the brightest minds in tech. With access to growth-oriented programming — networking events, workshops, panel discussions, fireside chats — RocketSpace members are given expert insights needed to scale fast.
Many of the world's fastest-growing tech startups leverage the power of ecosystem to achieve astronomical growth. By working alongside other likeminded tech leaders, founders can collaborate and tackle the tech industry's biggest challenges head-on.
Furthermore, by taking advantage of RocketSpace's one-of-a-kind corporate innovation program, members can validate products through pilot testing with leading corporate collaborators. Unlike other accelerator programs, RocketSpace does not require any equity in exchange for program participation. Additionally, RocketSpace facilitates introductions to industry-leading corporations seeking longterm investment opportunities.
Finally, RocketSpace takes the legwork out of office administration and maintenance. It's hard to build a billion dollar tech startup when you're scrubbing toilets, right? As such, RocketSpace provides useful amenities like mail delivery, complimentary beverages, breakout spaces, and even a nap room!
“For us, it was really important to have a flexible, hassle-free, professional place to work from. At RocketSpace, we have been able to create a space of our own, build a strong company culture, grow our team from two to fourteen people, and double the size of our business in a year and a half. The managed office space allows us to focus on activities that really move the needle for our company," says Kevin Mannion, VP of Marketing at Datahug.
Key Takeaway: A large part of becoming a unicorn is related to knowing the right people. Find a tech-centric coworking space that will help you save money, stay plugged in, and scale faster.
Scale Faster With RocketSpace
While the odds aren't great — only two percent of startups achieve unicorn status — it's possible. Focus on growth, build the right product, seek top investors, position your team within the right environment, and you will increase your likelihood of success.
Since opening our doors in 2011, RocketSpace has supported 18 companies in achieving unicorn status and is currently expanding its network with several international locations. Are you a Seed to Series C funded tech startup with a minimum viable product?