Startups that have achieved unicorn status are typically those that have used ground-breaking business strategies or technological advancements to upend their respective industries and have since seen explosive growth. Investors, clients, and the media frequently pay them a lot of attention, and they're frequently seen as future market leaders.
Source: Safalta.comA business must receive significant funding from venture capitalists or other sources before it can become a unicorn startup. The majority of the time, these investments are made to support a company's expansion, which includes growing its workforce, offering more sophisticated goods and services, and reaching out to potential customers.
A unicorn startup's characteristics
Being a unicorn is not easy, and today's unicorns all have unique backstories and a variety of traits that have benefited them. There are a few traits that all unicorns share, which we have listed below:
- Innovation that causes a disruption: The majority of unicorns have caused a disruption in the industry to which they belong. For instance, Uber transformed commuter culture. Travelers' lodging arrangements were altered by Airbnb, and social media usage was upended by Snapchat, among other things.
- The "firsts": It is clear that unicorns are frequently early adopters in their fields. They alter people's behavior and gradually become necessary to themselves. In order to stay ahead of rivals who may later experience a boom, they are also seen to maintain innovation.
- High on technology: Another feature shared by unicorns is that their business models are heavily dependent on technology. Uber created a user-friendly app that helped them get their model accepted. By utilizing the internet to its fullest potential, Airbnb shrunk the world.
- Consumer-oriented: 62% of the unicorns are B2C businesses. They want to be a part of consumers' everyday lives by making things simpler and easier for them. Another crucial aspect of these startups is their emphasis on affordability. For instance, Spotify has simplified music listening for people all over the world.
- Private ownership: The majority of unicorns are owned privately, which raises their valuation when a well-known company makes an investment.
A number of factors, including the development of technology and the expanding accessibility of venture capital funding, have contributed to the rise of unicorn startups. Particularly, the development of mobile technology and social media platforms has opened doors for new business models and products that have upended established sectors of the economy.
The term "unicorn" is frequently used in the financial sector to refer to a private startup with a value greater than $1 billion that has not yet gone public. A person changing into a unicorn is a rare occurrence. To become a unicorn, a company needs a special idea, a well-defined growth strategy, a solid business plan, and a successful pitching strategy to venture capitalists and private investors.