The best career paths to create a billion dollar company
As a soon-to-be graduate student, aspiring entrepreneur and VC-enthusiast, I wondered what would be the best way to successfully create a venture. While many previous articles discussed what degree course or what school would best prepare to become a unicorn founder (here and here), I believe that previous (or lack of) work experiences is a key criterion aswell. So I mapped the circa 450 unicorns in the world, and dug into the LinkedIn profiles of their Cofounders, with a special focus on the Cofounder and CEO of the unicorn.
I had two questions: What is the best career path for launching a unicorn? Where did unicorn founders work before launching their startup?
NB : The “Cofounder & CEO” is only one person : the Cofounder who were CEO at the creation of the startup. Sometimes, he or she is no longer operational in the unicorn : in these cases, I focused on the original Cofounder & CEO (and not the new CEO).
To cut a long story short for impatient readers:
- 50% of unicorn Cofounders & CEOs were previously Cofounders & CEOs of another startup
- 30% were Top Managers in a company
- 10% to 20% were students (!!)
- Few of them previously worked in banking, consulting, VC or PE
As this homemade Excel spreadsheet first appeared to be very useful to share with my friends from the perspective of a career (if I want to create a unicorn, what work experiences should I target?), I then shared it with entrepreneurs and aspiring entrepreneurs, who decided to use it to seek cofounders. I also shared it with some VC friends, who now use this research to better target the most likely successful founders (can I forecast the potential success of a startup based on the previous work experiences of its cofounders?).
Methodology
I focused on all of the c. 450 unicorns worldwide, but then discarded Asian startups, as the career path to success of their Cofounders & CEOs is too different from what we can observe in the West. However, I would be happy to discuss with anyone willing to do the same study with Asian unicorns!
Removing Asian startups from the panel, I ended up with c. 275 unicorns. I wanted to understand not only what their Cofounders & CEOs did just before launching their future unicorn, but also other relevant jobs. So, I ended up cross-analyzing two relevant jobs for 275 unicorn founders. Yep, it took me two whole days…
Results
The most frequent career path for unicorn Cofounders & CEOs … is Cofounder & CEO of a previous startup.
50% of unicorn Cofounders & CEOs had already founded a startup, and almost all also had the role of CEO. Their success is probably due to their leadership skills and ability to shape the global vision of a company. I find very interesting that among all entrepreneurs who then created a unicorn, so few were not previously CEO.
What happened to their startups?
Some sold their previous company (e.g., Adam Neumann’s Green Desk, just before founding WeWork), but other very successful entrepreneurs, such as Jeremy Allaire (founder of Circle), were also highly successful with their previous startup and managed to go public (with Brightcove in this case).
Some even managed to turn one unicorn into two, as James Monsees did with Pax Labs (vaporization technologies for cannabis) and Juul Labs (e-cigarettes). Unfortunately, due to the vaping-related public health crisis, things recently went sour for James and his cofounder Adam Bowen…
Other founders are still there in their previous company. Most often, they are no longer actually operational in the company (Thomas Rebaud, cofounder & CEO of the unicorn Meero, is still President of his former company Diji). However, some others, such as Melanie Perkins (CEO of the unicorn Canva and one of the rare woman CEO of a unicorn), also manage to remain operational in their previous venture.
Unfortunately, some previous ventures launched by unicorn founders no longer exist (Alex Austin’s Kindred Prints, before he created the unicorn Branch Metrics).
➜ Whatever the outcome may be, the best path toward founding a unicorn appears to first create and run a company… and then who knows what might happen! 😉
The second most frequent career path of unicorn Cofounders & CEOs is Top Manager.
One-third have already been at least once Top Manager (not entrepreneur, not CEO) in a company. It appears that no specific kind of company promises future entrepreneurial success more than another. These entrepreneurs worked in:
- Companies in the same sector: for instance, Alex Timm, CEO of the unicorn Root Insurance, spent four years at Nationwide Insurance before launching his startup. The idea is to understand an industry in depth, perhaps to create a huge network and, more than anything, to identify flaws.
- Companies in another sector: Taavet Hinrikus, cofounder & CEO of the unicorn TransferWise (foreign-currency transfer), was previously Director of Strategy at Skype. Even though the situation is probably very different from the industry he was previously working in, the issues are often the same (long-term strategy, hiring, etc.).
- Tech companies, which are sometimes also in the same sector as the unicorn. For instance, Chris Urmson, CEO of the unicorn Aurora (self-driving technologies), was previously CTO of Self-driving cars at Google. How convenient… Benoit Dageville, who cofounded the unicorn Snowflake after working for 16 years at Oracle, is another good example.
The third most frequent category (and this was a big surprise for me) is students creating what is often their first venture, just after finishing school… and ending up CEO of a unicorn.
10% all unicorn founders had no professional experience before launching their startup — or even almost 20% in Europe (though the sample size is only 8 for Europe). The example of Brian Chesky, who co-created Airbnb in order to pay his rent, is a well-known example. Markus Villig, Founder & CEO of Bolt, also deserves our admiration, especially in such an operationally complex business.
Other jobs are infrequent as previous experience of unicorn founders:
- Non-entrepreneur CEO (only ~ 4% of all Cofounders & CEOs of unicorn have already been at least once non-entrepreneur CEO)
- Banking (~ 3%) or consulting (~ 4%)
- VC or PE (~ 9%)
➜ Some people are truly amazing when it comes to making a company profitable, leading several thousands of employees, forecasting what technologies will be vital in the future, and funding the best team to create it, or investing in complex financial derivatives, etc. But going from Zero to One, and way beyond, is another thing.
The cross-analysis is summed up here:
As discussed, three career paths bring out : Cofounder & CEO, Top Manager, and post-graduate students (“0” means no previous work experience).
➜ The detailed Excel spreadsheet and cross-analysis for each region (Europe / North America / Others ) is available here. If I have made any mistakes, omissions or inexactitudes, don’t hesitate for one moment to let me know! (See below).
To wrap it up:
For all aspiring entrepreneurs aiming at creating a unicorn, the most important thing seems to be to have operational experience for a few years, whether in your own company or somebody else’s.
Limitations and Disclaimer:
No kind of work experience can stop you launching a unicorn — and no specific experience will guarantee you success.
Indeed, this statistical study presents some limitations. For instance, few unicorn Cofounders & CEOs previously worked in VC or PE, but regarding the small amount of persons in these jobs, their representation in this study is significant.
This study only measures the mass, not the success rate. It would probably be wrong to only conclude that to succeed, one must not be “non entrepreneur CEO” or VC but rather executive in a company.
Are you currently raising money?
Reach out to Victoire at victoire@kerala.vc and read my previous article: VC is just another client to close.
To reach out to me: my Linkedin page, or at aubin.rioufol@gmail.com.
Source : CB Insight’s list of unicorns. Last update : January 2020
