Creating a business plan is only one aspect of running our own company. Although we do require a concept at first, we should subsequently refine it to determine what we want to do and how to do it.

The next step is to confirm the viability of our plan by examining our capital commitment, starting cost analysis, location, and market research.

We can operate our business and attempt to meet the profit and growth targets we have established after completing the business study, registration, and other initial phase criteria. Most businesses find this challenging, but a few are able to grow rapidly and surpass $1 billion in worth. These companies are referred to as “unicorns”.

What’s a Unicorn Startup?

A startup that has been in operation for less than 10 years, isn’t publicly traded, hasn’t been bought by another company, and has reached a global valuation of $1 billion or more is referred to as a unicorn. It was given that moniker by Aileen Lee, the founder of Cowboy Ventures, who used it in 2013 to describe software companies that had been valued at that level without going public.

More than 1,100 unicorn firms are currently operating on the planet, according to consulting firm CB Insights, mostly as a result of new technologies. More unicorn startups are located in the US than any other nation.

Startups known as unicorns rely heavily on information and communication technology (ICT). An SME is not the same as a startup. A startup is a freshly established business with an innovative, scalable business plan. Low material costs and outside investors (such as “business angels,” who, unlike traditional investors, take a stake in the startup’s earnings and participate in its management) maximize development potential.

A SME, on the other hand, is a small and medium-sized business, according to factors like its revenue and human resources. An SME, in contrast to a startup, is not always a young business, seldom receives funding from outside investors, and usually targets a certain market. The scalability and growth of a SME may be constrained by these more conventional business qualities. Finally, while a SME may use modern technology, its business strategy is not built around it.

What Makes a Unicorn?

There is no standard formula to create a successful unicorn startup. It depends on many factors, some of which are out of our control. Some of the most common traits of unicorn startups are:

• Recent creation: Unicorns are emerging businesses that exploit a small or unknown market niche and achieve a value of over 1 billion dollars. Their workforce is also a sign of their “youth”, with employees being, on average, 30 and 40 years of age. 
• Innovation: New technology is a basic business feature of unicorns to make operations and communication more efficient. They often use social media to gain recognition.
• Scalability: Unicorns scale up and boost their returns quickly while keeping costs low. 
• Financing: Unicorns are adept at attracting investors and maintaining private equity, without being publicly listed.
• Business model: Unicorns’ strategies target end consumers with a disruptive alternative that meets their needs. Not only do they focus on their product, but also on customer satisfaction.

Unicorn Startup Checklist

The business world holds unicorn startups in high regard, and properly so. A company must get a valuation of $1 billion or more in order to qualify as a unicorn startup, and as of 2023, there are only 554 unicorns globally. Divvy, an analytics firm, Starburst, and SalesLoft, a sales engagement platform Seven businesses joined The Crunchbase Unicorn Board in the first month of 2023, making it the third month in a row where the number of new unicorns has been under ten.

While not impossible, becoming a unicorn can be very challenging. In actuality, the likelihood of a company becoming a unicorn is 0.00006 percent, and it takes young firms seven years on average to become unicorns. However, some startups succeed despite all the odds. In order for you to emulate successful unicorns and become more like them, we’ll go through their common traits and tactics.

Read Also: What Are the Success Criteria For Entrepreneurship?

While this unicorn startup checklist doesn’t guarantee that you’ll become a unicorn, it’ll help you better understand the processes and business strategies that startups utilize to succeed in their markets.

Follow these steps to build a product, find a business model to generate profit, attract investors, and eventually scale up.

Develop a minimum viable product (MVP)

• Identify a user problem and propose a solution
  • Discover a “large, homogenous” potential target market
  • Create a product that’s accessible, user-friendly, and cost-effective
• Develop an MVP with only the necessary features included
• Test the MVP with users to get feedback
• Make changes to the MVP based on feedback
  • Calculate the costs to build the product
• Build and launch your product

Determine Your Business Model

• Confirm that your product solves real problems based on user feedback and initial performance
• Identify your primary customer and audience
• Develop a strong value proposition that sets you apart
• Price your product based on:
  • The value it provides users
  • Competitor prices
  • Target market demographics
• Select sales channels for your product
• Execute a local or small-scale rollout to validate your business model
  • Focus on delivering positive customer experiences
  • Gather customer reviews
• Review and revise your business model periodically

Secure Funding

• Bootstrap by:
  • Investing your own funds
  • Getting contributions from friends and family
• Raise venture-backed capital through seed and/or Series rounds
  • Prepare a pitch deck
  • Pitch to investors
  • Prepare for due diligence
  • Negotiate with investors and sign the contract
• Launch a crowdfunding campaign
  • Showcase your product or business idea
  • Communicate the benefits of investing in your company
  • Set a funding goal
  • Promote your campaign
• Obtain a loan from:
  • Banks
  • Venture capital firms
  • Credit unions
  • Online business loan providers

Scale Your Startup

• Ensure you have achieved product-market fit
• Document and standardize processes for customer acquisition and sales
  • Determine how to identify prospects
  • Develop advertising and marketing strategies
  • Automate marketing and sales processes if possible
• Expand your business to other locations/markets
  • Add new features or products to existing offerings
• Assemble a team by hiring new talent
  • Create new departments as needed
• Attract new investors

Despite the fact that millions of new businesses are founded each year, the majority of them fail, and only a small portion of those that do succeed go on to become full-fledged unicorns. Let’s look at the traits these unicorns have in common and how you might imitate them to increase the chances that your firm will succeed.

1. Unicorns are Disruptive

In business, disruption is a good thing, especially for aspiring unicorns. Disruption refers to innovation in an industry that radically affects the way that the industry or market operates. Disruptors usually start out at the bottom of the market by providing simpler, cheaper solutions that meet the same needs as higher-end products.

These products become increasingly appealing to consumers due to their affordability, and the business gradually moves up the market, maybe even taking it over. A notable example is Netflix, which disrupted the video and TV industry by providing budget-friendly streaming services.

Disruption requires startups to come up with new, creative solutions that might differ from the conventional. To do so, experiment with different business models — such as freemium, subscriptions, or commissions — until you find one that works for you. Think outside the box and seek to innovate, but also remain agile so you can pivot at any given time.

2. Unicorns are Tech-savvy

Growing companies take advantage of technologies and software available to help the business scale. Whether it’s through cloud computing, Customer Relationship Management (CRM) systems, or business software, leveraging technology allows companies to run more efficiently with fewer resources.

Advancements in AI make it one of the most versatile tools that businesses can take advantage of. AI can be used to automate processes, provide customized user experiences, improve customer service, and more. For example, DoorDash uses AI for logistics, and Kabbage uses AI to disrupt the banking industry.

To go beyond just using technology, you could also base your product or business on technology, as the majority of unicorns do. In fact, nearly 90% of unicorns provide software products.

3. Unicorns are Consumer-focused

Over 60% of unicorns have a B2C (business-to-consumer) business system, which means their business model revolves around providing affordable products and services to everyday consumers. To create products that consumers actually want, you have to identify ways to improve the lives of a specific target audience. Additionally, products also have to incorporate intuitive UX design so that it’s easy for consumers to use and understand.

Unicorns offer a strong value proposition or a promise of how and why the product will bring value to customers. Having a strong value proposition will improve both your sales and marketing efforts.

As technology becomes more integrated with business operations, these useful tools can help elevate your startup.

4. Unicorns are Efficient

The concept of building MVPs comes from a business approach that’s known as the Lean Startup, in which startups can maximize efficiency by repeatedly testing and adjusting their MVPs based on user feedback.

Since MVPs are only equipped with the “must-have” features, it’s more cost-effective to build and allow you to pivot without sacrificing a fully made product.

One example of a successful MVP was Uber, an idea borne out of the founders’ struggles to hail a cab on a wintery night in Paris. They initially tested their MVP with only three cars and a simple interface, collecting user feedback after each ride to make improvements. After adding new features over the years, Uber has grown to be a world-renowned company.

Like Uber’s early MVP, your MVP doesn’t have to be fully complete. It’s meant to gauge whether users are interested in the product at all, so if there’s no interest, you can scrap it and pivot to another idea.

5. Unicorns are Growth-driven

The authors of the startup book Exponential Organizations found that unicorns employ strategies that allow them to scale at exponential rates, thus they’re dubbed as “exponential organizations.”

The unicorns analyzed in the book selected a Massive Transformative Purpose (MTP) for their business like Google’s “Organize the World’s Information.” An MTP is a highly ambitious goal that drives the team and encourages them to think outside the box to reach said goal. With a clear vision in mind, these unicorn companies achieved growth by validating their marketing and sales channels with local testing, then quickly replicating the successful strategies in other locations.

To scale your company like a unicorn, you should establish clear growth goals and identify a vision for your company, or perhaps an MTP. Create a plan to scale by identifying promising sales channels and using key performance indicators to keep you on track.

New Unicorns Growth Examples

Growth does not occur quickly. To become a unicorn, even the fastest-growing firms may need to go through several rounds of investment. Apply their business-growth and management advice to your own startup to follow in the previous unicorn businesses’ footsteps.

Hire the Right People – Guild Education

To build up a successful startup, you need strong team members who will help drive growth. It’s important to hire people with not only the skillsets you need, but also the same values. If everyone is on the same page about where they want the company to go, you’ll be able to collaborate more cohesively to reach those goals.

This approach applies to hiring team members as well as members of the board. Rachel Carlson, co-founder and CEO of ed-tech company Guild Education, said having a board is essential in helping identify business risks and potential areas of growth.

She suggested changing the board member roster as your company scales to create a board that will help meet the company’s new needs.

“A shared value system and a level of trust [are] really important because it’s easy to get sideways,” she said.

Solve Real, Existing Problems – Canva

Products that address customers’ needs or wants will naturally gain users. That’s why it’s important to identify a problem that your business aims to solve from the get-go. Online infographic creation platform Canva did just that, and was able to earn unicorn status in 2020.

“If your startup solves a problem, when you launch, you’ll have an audience that cares about your company. And then they will tell other people because they care about that problem, too,” said founder and CEO Melanie Perkins.

Problems can be inspired by personal experiences or common issues faced by the general population. After solving the initial problem, continue improving your product by adding features that users want and ask for.

Manage Costs Effectively – Quizlet

To become a unicorn, you may have to start thinking like a camel, an animal that represents adaptability, perseverance, and resilience as they’re able to survive in the desert.

Having this mindset is especially useful during times of business uncertainty — during the pandemic, for instance — as it allows you to get through the crisis and sustain growth during unpredictable conditions.

This requires financial planning and effective cost management throughout the business life cycle to aim for a long-term growth curve. Reduce your burn rate by cutting unnecessary costs and invest in the most important things — your product and your team.