Dedicated to all founders and investors who have made this world so dynamic, interesting and wonderful.
Unicorn evokes
intrigue!
Word "Unicorn" was coined By Aileen Lee in 2013, when she thought it was a Unique phenomenon to have 39 startups with valuation more than 1 billion. She would not have imagined that world may have 1000 plus of them, 7 years later.
As on today, March 2022, there are 1032 Unicorns in the world. With the cumulative Valuation of 3400b$. This is 1.5 times of India’s GDP.
Isn’t this incredible?
US has 487
unicorns, and China has 301 Unicorns, and India 95. In 2021, India added 44 Unicorns in year 2021.
Pareto principle works here too…..Highest valued 3 startups, ByteDance Space-x, Stripe ; accounts for 10% of the total valuation.
Wow ! This is called real success!
India has lots of ground to cover. However, we are doing rather well.
I was so glad and proud to land in Udaan. A 3b$ company. Later I was humbled by the fact, that there are 248 startups worldwide which are larger than Udaan today. Inspirational and depressing...at the same time.
While India is catapulted into an entrepreneurial spree. 2016-17. India registered 733 startups. In five years the no has reached to 62000 in Jan 2022.
Which means that probability of a start up to become a unicorn in India is 0.00002% !! Which is so very low !!
Such intelligence, such grind, such commitment, and so low
outcome. Disheartening.
I attempted a startup 3 years back and failed ! And fortunately, I got the chance to be a CXO in Udaan, which is a large, very successful Unicorn. Had a chance to learn as what ingredients are required to make a Unicorn. And what should I have done differently.
Created a hypothesis of it. Please add or critique it.
Journey of being a Unicorn
1. Qualifying
2. Clearing Choices Paradox
3. Building Ecosystem
First Qualifying on following aspects:
Startups should check for following 5 eligibility Criterion by asking hard questions to themselves.
Disruptive: Without and exception, all Unicorns have brought disruption in their own field.
They have chosen large canvas, large problem to solve and solved it radically. Snapchat, Dream 11, Ola cabs, cred, Meesho… Long list. Are you solving for small idea like college friends to come together or you are altering the way a specific function is done at a national level. And in today's economy there are significant no of things which needs to be addressed. Pick a large problem.
2. Tech focused: A recent study suggested that 87% of Unicorns are built on the tech., 7% are hardware and rest 6% are services and products.
Funding is also easy in tech space. Hence, quick check, if tech
is going to play a large part in scaling up your startup ?. Razorpay, Zerodha, Urban company, policy
Bazaar, Pine labs, Groww, billdesk… and so on... had advantage of tech helping in business transformation.
3. The firsts : There is clear advantage of being first in the segment.
However Unicorns also need to be on toes and keep on innovating to remain first as competition build up. Nykaa, Coindx, Udaan, Fractal analytics, curefit, InMobi etc.
Lots of time, FIRST CAN BE LARGEST.
4. Consumer focused : 62% if the unicorns so far are in B2C space.
They change the way individuals operate. Eg, Spotify, Swiggy,
Zomato, Byjus, Makemytrip, Bigbasket, Grofers, rivigo, licious, Spinny,
mamaearth..etc. Even if you are in B2B, consumer centricity is at the core.
5. Efficient : MPV ( Minimum viable product) comes from the need of being Lean.
It shall have must haves and yet very efficient. In
cost and in it’s outcomes. Also a pertinent is how much shall one invest in
head count ahead of revenue curve. Hence efficiency is very important.
Clearing 6 Choice Paradoxes :
1. Intent paradox : In my interactions with
the founders of Unicorns, I have observed that they are strongly driven by urge
to solve a large problem. Some of them end up being Unicorns. On the other
hand, people who are driven by need of being a serial entrepreneurs and make
quick money, don’t end up being that…. It’s a paradox perhaps.
There is no shortcuts to success. And there has to be a strong reason
for one to bear the pain of kicked around, not getting paid, suffer through
years of misery, with no certainty of success for about 4.5 years, which is
world average to get to unicorn. Only
one thing can keep founders going…. Hope ! that someday people’s life would be
changed for good.
2. Knowing paradox : If you know what
to do, chances are others know it too. And It’s unlikely to be disruptive. Hence
lots of unicorn founders start with not knowing exactly. They have some sense
of opportunities and risks, rest keeps on coming up. Funding, market
situations, regulations, etc are all very dynamic. Innovation is the only
sustainable competitive advantage a company can have.
3. Scale Paradox : Scale first or Shape
first is a continuous debate. Assumption is that scale gives cost efficiency which
gives shape. Not always in my view. There are numerous example of unicorns
still losing tons of money. Hence, prudent thing should be to set up a threshold
of scale, where business should become profitable. And then again push the
scale. Nykaa has proved it without doubt for all of us. Harshil Mathur, Founder
Razor pay stated “The idea is to prove a scaleable business model first and
grow from there”.
4. Efficiency Paradox : Efficiency or
Agility is another Paradox which comes when business becomes large and is lead
by professional teams, instead of the founder. Systems and processes creates
strength at the cost of speed. What is a good way out ? Perhaps get into cumbersome
systems slowly. Give priority to speed. As there is still lots to be learnt and
systems are best fluid. This has been a
great learning for me.
5. People paradox : There are very very
few people who are good problem solver and also good institution builder. Hence
there is a fine balance of talent mix required. And also it’s a subtle art of
allocating responsibilities so that best of both is available. I think that a
Mentor can add lots of value here.
6. Love paradox : Lot of the times, founders are not the best people to take org beyond a certain level. And that is the time, when they should be willing to let control go, of the child which they love more than their lives. The maddening affinity which helped business come to certain level, has to be given up. Painful but necessary. Letting YOUR unicorn go.... For Good.
Ecosystem buildup stage :
I learnt
term GLASS WALL. It’s the term used to get the consumer into the ecosystem and
not let them go out. This leads to concepts like Alibaba and super apps.
Here is the
story of Alibaba group, which blew me out of my Mind… And which made it a whooping
650b$ co. in 2020.
It’s know
that Alibaba started with the B2B business in 1999. Got into local markets
through 1688.com, then into B2C through Aliexpress, extended into C2C through
Taobao in 2003, Payment was enabled through Alipay. They didn’t stop there, branded
mall was launched in 2008 as Tmall, and premium international business through
Lazada. Wow…
It does not stop here....The Unicorns rides further in the rain of money..
They
further created supporting business like Taobao data cube for insight into data
of aggregated demand and helped sellers, Got into live commerce through Taobao
live, Created a search engine etao in 2010 for online shopping, Youku was
launched as a combination of youtube and Netflix which helped consumer stay
with Alibaba world, and best of it is when they launched Wasu Media internet limited
as the digital entertainment company.
You thought
it was end of it… Now hold on…
Alibaba has
presence in Cloud computing ( Alibaba cloud), Innovative initiatives are lead
by Dingtalk, amop.com, Health business – Alihealth, Local consumer service –
ele.me , koubel, Logistics service – Cainiao, Deals business – Taobao deals, ticktok
equivalent – Taobao short video, Grocery delivery – Taobao Grocery…. There are
other also… idlefish, Fliggy, Juhuasuan.com, Alimama……..
Jackma
would have thought in this mind in Mandarin… “ Chodunga Nahin !!”.
Indian Unicorns would also go in the same direction. Where one business would start to
feed into another to create a GLASS WALL.
These are some of the Bitter sweet truths of getting on a journey of Unicorn.
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