Will My Startup Ever Be Worth 1 Billion US Dollars?
Have you asked yourself this question before? I am sure you did! Can someone answer your question with Yes? Certainly not!
In today’s Unicorn-Startup-Hype, you barely exist if you are compared with the US success stories of Facebook, Instagram, WhatsApp and Co., but no one is telling you that concomitantly with Facebook there were another 10,000 Social Networks on the market in 2005 — and only one of them is now mega successful. Therefore, some fundamental questions come to my mind: How probable is it anyway for my company to ever be worth 1 Billion US Dollars and what should I do in order to steer my project in the right direction?
Let’s go on with being realistic / pessimistic: there is no recipe, no roadmap, no step by step guide that you can follow, but you’ll find a whole bunch of wise guys that overwhelm you with tips and advices on a daily basis.
So what are the requirements for being able to sniff in Unicorn-air?
The top requirement is, of course, the idea … that must simply … be top. At a first glance, this is more than obvious, but in most cases people forget which parameters create a good idea. On one hand, the idea must be something that people are eager to have and that they can no longer live without (Facebook rings a bell?). On another hand, no other competitor should be around — one that might offer a sufficiently good alternative solution. This would ensure that your own startup could only overtake its competitors with great effort, in terms of both investment and time. Therefore, if the goal is to become an Unicorn, an idea that treats an unsolved problem should be used.
Additionally, the size of your product’s target audience is also of great importance; to be even more precise, a solution that is used by only a few people is not worthless, but does not hold the Unicorn potential. It is also useless to be on a market that is not suitable for your solution.
Fortunately, at the present time one can perform a Proof of Market fairly quickly, while bringing the solution in front of the first customers (e.g. testers). Therefore, not much is needed in most of the cases. Nevertheless, in order to raise a Unicorn, a Proof of Technology must also be provided. Many actually think that you can conquer the world with a semi-finished product. But only a very polished and mature product will have the desired effect.
Sooo, the proofs are provided, now you simply need to collect many from investors in order to scale your business quickly, then work hard for a short time — that’s the time when you can start to the right saddle for the Unicorn. Sounds easy, right?
But will my startup be a Unicorn just because I work hard? Hardly! I have rarely met someone who was not fired up with enthusiasm about his/her startup and didn’t put all efforts into it — regardless if the ideas were good or bad. Nevertheless, most startups did not become successful. The success is not directly proportional with the amount of energy that one puts into the idea, but it rather depends on the decisions taken. Here is where the wheat is separated from the chaff — success and failure. It is basically not about making no mistakes. In reality, the number of errors is crucial — and how many free shots one has. I have taken many wrong decisions at Stackfield and each one of them could have well been the shot in the neck.
Some founders find the right path soon enough, while others tend to make the same mistakes over and over again. The idea that an investor will start throwing away money at your direction just because you work hard and you are ambitious is also far-fetched.
A lot of factors come together in determining whether your project will make it to the Startup-Olymp or not. On one hand, it makes a big difference where the startup is founded — the ecosystem evolves differently in each city -, and so it may be that in some areas there is not enough talent or the necessary infrastructure is not in place. On another hand, the timing plays an essential role. Is the market ready for this solution? Am I too late? Have others started the development of this product? Even the economic situation can take a strike at the timing. Are we in a recession? During such times, it is obvious that a founding is not advisable. Fast growth is all nice and good, but ultimately not all factors that contribute to that success are in one’s control.
All startups are compared with Unicorns at any stage: Look at them, they were that huge and that successful after 1 year! Did you hear of that or that company? They did become larger than everyone else overnight! Yes, these stories exist, but you should not let yourself be influenced too much, and for one success story there are thousands of failures. Moreover, the world between Unicorns and mice is also quite reasonable. I also find rhinos great!
Oh yeah, I almost forgot to mention luck — you will need a lot of it!