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Everything you need to know about the Unicorn Startups

India's unicorn spree and the incredible roar of Tiger Global

The term “unicorn” has evolved from a legendary creature to a common occurrence in business and financial conversations. Unicorn firms have gained notoriety and carved out a niche for themselves in the market. Having said that, not every unicorn will turn out to be a successful business. 

The idea is that after a business reaches a certain milestone, it must continue to work hard. What can you do to become a unicorn? Becoming a unicorn is the envy of many businesses, but what can you do to get there? This tutorial delves into some of the characteristics that distinguish unicorns, such as geographical location, industry breakdown, and lessons that may be applied to your business. That way, you can better understand unicorn land and how to model your startup. 

What Makes a Unicorn Startup?

In the venture capital business, a unicorn is a startup that has a valuation of $1 billion or more. Aileen Lee, the founder of Cowboy Ventures, invented the phrase when she referred to the 39 businesses with a valuation of over $1 billion as unicorns. Originally, the word was intended to emphasise the rarity of such businesses. Since then, the definition of a unicorn startup has stayed constant. The number of unicorns, on the other hand, has increased.

Mapping Global Unicorn Startups

Over the last decade, Unicornland has grown from a small group of entrepreneurs in the United States to a global organisation. While unicorns can be formed anywhere, the Class of 2020 (and previous classes) are predominantly found in the United States and China, both of which have abundant growth-stage capital. These nations are also home to unicorn outliers, or businesses that have become so successful in their early years that the name “unicorn” is no longer appropriate. The decacorn (businesses worth more than $10 billion) and hectocorn (those worth more than $100 billion) are two of these variations.

Features of a unicorn startup

· Being a unicorn isn’t easy, and each one has a unique narrative to tell, along with a list of characteristics that helped it succeed. We’ve compiled a list of common points that can be found on all unicorns:

· Disruptive innovation: Almost all unicorns have caused a disruption in their respective fields. For example, Uber revolutionised the way people commuted. Airbnb altered the way people booked their vacations, and Snapchat affected social media usage, among other things.

· The ‘firsts’: Unicorns are frequently viewed as pioneers in their fields. They alter people’s behaviour and eventually establish themselves as a need. They are also seen to keep innovation up and running to stay ahead of competitors which might later boom.

· High-tech business models: Another common theme among unicorns is that their business models are based on technology. Uber was able to get acceptance for its business model by creating a user-friendly app. Airbnb makes the globe appear smaller by harnessing the power of the internet. According to a recent survey, software makes up 87 per cent of unicorn goods, hardware makes up 7%, and other products and services make up the remaining 6%.

· Consumer-oriented: 62 per cent of unicorns are B2C businesses. Their objective is to make things simple for customers and become a part of their daily lives. Another major feature of these businesses is that they keep things inexpensive. Spotify, for example, has made music listening more accessible to the rest of the globe.

· Privately owned: Most of the unicorns are privately owned which gets their valuation bigger when an established company invests in it. 

Can only a startup be a unicorn?

Yes, it is correct. Only ‘startups’ with a valuation of over a billion are referred to as unicorns. The startups with a valuation of more than $10 billion are referred to as decacorns (a super unicorn). Dropbox, SpaceX, and WeWork are just a few of the decacorn companies.

Lessons from Unicorn Business Leaders 

Thanks to technological innovation and creative business tactics, unicorns have either disrupted current industries or established totally new ones. Unicorns, on the other hand, were not always members of the herd. After all, every unicorn began as a concept, perhaps even in the garage of a visionary – some teams lacked expertise, business development, and management abilities. Regardless of their unique stories, all unicorns experienced the same obstacles that each business does, and examining how they dealt with these issues may teach us valuable lessons, particularly in the early stages.

The Future of Unicorns

In 2013, the term “unicorn” was largely used to describe a company based in the United States. It now covers the world, with new unicorns joining the ranks every year. While unicorns are usually referred to as the new normal, there is one caveat. In the last five years, the number of venture capital-backed companies has risen by more than 100,000. As a result, the unicorn remains a statistical outlier in the venture capital world.

About Azba Rehman

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