How’d you have reacted 20 years ago if an aspiring entrepreneur in his mid-20s came to you with an idea to make space travel affordable for everyone?
You’d probably laugh it off, call it utterly bizarre, and show him the door, right?
Well, here’s what Forbes has to say: SpaceX, the brainchild of entrepreneurial baron Elon Musk, has raised almost $1.16 billion through equity crowdfunding in two months and is currently valued at $74 billion in 2021.
Short of words, are you? You’re most likely to run out of superlatives to describe a unicorn startup or a privately held company with a whopping $1 billion or even higher market value.
And it’s not just SpaceX — Uber is now a dictionary term, Bytedance is literally making the world dance to its beat — and the examples of how unicorns revolutionized our lives could go on.
But It Still Doesn’t Answer The Question – How Is All This Possible?
As per a recent study, almost 50% of all new US startups fail within the first five years – so it’s evident that establishing companies in today’s market isn’t a cakewalk.
So, how are such companies managing to boom out of nowhere into billion-dollar enterprises? There must be a reason these businesses are called “unicorns” — it’s so surprising that you’d compare it with owning one of those mythical legends in real life.
An Entrepreneur.com study suggests that the USP of a unicorn startup is that they either disrupt the industries they enter or establish entirely new ones. And the credits go to how well-planned, strategic, and technologically advanced these companies usually are.
That said, here’s the secret to success that the most giant unicorns leading today’s marketplace have taught us:
Make What The People Really Love
Here’s a groundbreaking piece of advice that Paul Graham (CEO, Y Combinator) shared with Airbnb CEO Brian Chesky during the initial days: “Getting started, it’s always a wise move to focus on creating a product that a hundred customers really love, rather than chasing something a million customers like.”
Everybody loves the idea of “starting big,” but how frequently are the odds in their favor?
New research shows that 90% of brand-new and 75% of venture-backed startups created in 2020 worldwide had shut up shop within the first year.
So, we’re guessing, not very often.
Here’s some advice:
Focus on building something that people, regardless of how small of a segment.
Watch your satisfied customers preach the gospel of your services to their friends, acquaintances, and relatives.
You’ll be amazed at how word-of-mouth can propel your enterprise to heights you’ve never imagined.
Two Disruptors CAN Co-Exist
It’s a common saying that two kings can’t co-exist – but how relevant is it today?
Many entrepreneurs stray away from markets where other companies have a first-mover advantage. But what if you have a concrete plan and a solid go-to-market strategy to build yourself a sustainable business in an industry that a global player leads?
Should you scrap the idea? Let’s find out.
Here’s an example: cab service provider company Lyft came into existence at a point when Uber was already in its third year of business.
However, current stats have revealed that Lyft shows faster growth than its rival, Uber, as the second quarter showed a 25% rise in taxi bookings. Besides, as per reports, Lyft is already valued at $5 billion.
Let this story be an example: Even if a market has already been disrupted, apt positioning can still allure customers toward a challenger product or service.
Summing It Up
Every unicorn was once perceived as a bizarre idea by the naysayers.
However, with the right plan and resources, you can set up any business you venture into. Here are our two cents – selecting niche markets as your entry point is wise, as they’re most appropriate for disruptive innovations.
Subscribe to our newsletter and stay up-to-date with all the latest news, tips, and insights about business, innovation, and entrepreneurship.