There is so much that goes into taking a startup all the way to unicorn status. Before we dive into all the ingredients that are needed to bake this cake, there are a few terms you should be familiar with when talking about startup terminology. If you have already read Startup Studio Insider’s recent article, Startup Studio Terms You Should Know then you know a unicorn is any startup with a valuation of $1billion dollars or more, making them the rarest and most prestigious companies in the startup space.
When the term “Unicorn” was first applied to the startup world to describe these ultra rare companies, there were only 39 in existence. Today, unicorns are being created roughly every three days. While every unicorn handles their business a little bit differently, success leaves clues. Those clues are going to be the guideline we use to cook up the ultimate unicorn recipe.
Let’s go through the key steps in the startup unicorn recipe that all founders should follow prior to launching their business:
As any great chef will tell you, the secret to having success in the kitchen lies in getting organized. “Mise en place”, as the French say, is a culinary term for getting all of your ingredients measured, sliced, peeled and ready for use. Applying this same logic to our own situation, we know that success in the business world also requires a lot of organization. In the case of unicorns, it requires an extreme amount of organization. All unicorns from AirBnB to Uber started with one thing in mind, the desire to solve a familiar problem, and grow their business around this goal. When Airbnb started, it wasn’t the $31 billion dollar company that it is today.
It didn’t start with an app, proprietary technology, or a staff to carry out their vision. It started with three roommates buying into the idea that if they rented air mattresses on the floor of their apartment, they could help travelers save money on lodging for a massive design conference that came to their town. It was simple. The idea quickly took off for them, though it wasn’t without struggle. Once they found an investor who would work with them, they spent 3 months getting organized and building their product before taking it to market.
Testing your product
Chefs are always tasting as they cook. They know that before a dish reaches a customer’s table, the quality of their product needs to be checked. Just because the recipe they used yesterday tasted amazing, doesn’t mean that the ingredients will blend the same way today. Quality control measures are just as important for founders as they are for chefs. While developing your product, it’s crucial to test it at each phase.
This means not just running internal tests on an app you are developing, but also testing the concept on members of your target audience. Getting consumer feedback through the development process will allow you to make sure that the product you’re using serves your customers in a way that’s truly going to bring value. Working with startup studios, and their similar counterparts like accelerators, and incubators, founders are able to get more than funding, but key over sites that help to help make
this testing easier. When Airbnb first started working with an investor, the founders themselves were running small tests on their website with real users. They went out and stayed in the homes that were listed, wrote reviews, and talked with their hosts to find out what was working for them and what needed to be improved. This happened years before their app was developed and long before it became a global sensation. They took the time to get feedback from their customers before their final launch.
Scale Your Company
Ultimately, when we talk about the successes of any unicorn startup, we have to talk about their ability to scale and grow quickly. Once your company has repeatedly tested its prototype, gotten customer feedback and are ready to launch, you will need to make sure you have the capital to make your next move: hiring a marketing and sales team. Having the right people on your team
to help brand and promote your product is going to be critical if you are going to break into the upper echelons of the business world and reach that $1billion valuation. It’s not likely that your initial market is going to be robust enough to support this level of business growth, which is why expansion isn’t a luxury, but a necessity. This is where sales and marketing are critically important in bringing your product to new markets.
The one thing all unicorns have in common is that they all acquired large customers early on. Consider the role that eBay played in the success of PayPal. In 2000, PayPal secured a deal with eBay to become their exclusive payment service. A truly massive accomplishment for their company. While this alone was an achievement, it validated their company in the eyes of consumers, resulting in over 100,000 new business accounts and a jump in their user base from 1million users to over 5million.
Building a unicorn is no easy feat. It requires diligent planning, a customer-centric mentality, and the drive to scale your business into new markets. These essential ingredients are common amongst all unicorns. While getting there is not going to be easy, there are plenty of resources available to new companies to help them get off the ground. Consider linking up with a startup studio to help get you there. Startup studios provide all the essential tools to ensure your startup batter is well cooked before serving it up to the public.
For more information on the startup world, be sure to check out Startup Studio Insider for all the latest updates and information on the growing world of startups.