In the business world, a unicorn is a private company with a valuation of $1 billion or more. It’s a rare and extremely difficult moniker to achieve, and as of August 2019, there’ve only been 379 unicorn companies ever (here’s the list). In fact, experts estimate a new business has just a .00006% chance to achieve unicorn status. Whoa!
Thousands of new businesses pop up every year, each started by an entrepreneur with dreams of unfettered success. Statistics show, unfortunately, that more than half of those businesses are gone four years later. So how do you avoid that fate? Wild unicorn growth may be magical and rare, but research shows a few common characteristics among those highly successful SMBs. Let’s look at three.
1. Unicorn companies set a vision for growth
The first step to achieving high growth is basic: establish a growth culture. To do that, create and share revenue and headcount goals for where you’d like to be in one, three, and five years, and hire experienced employees based both on what you need now and what you’ll need in the future.
Consider payment software Stripe, which achieved unicorn status in 2014. As Stripe’s CEO Patrick Collison says, “You don’t have a valuable company unless the company continues to execute.” In other words: ambitious companies have to continually seek new ways to innovate — complacency is the enemy of growth. Research shows 60% of small business owners are actively looking to grow, while 36% seek to maintain their size and 4% would like to shrink. Yet even with a growth mindset, challenges are aplenty:
2. Unicorn companies use technology to automate and scale
Growing companies are much more likely to use software and technology to help the business grow and scale. For example, growing SMBs are 139% more likely than stagnant/declining SMBs to say a CRM system helps attract new customers, and 44% more likely to say the same for marketing automation.
Adam Neumann, CEO of unicorn WeWork, nailed it when he said, “The most precious resource we have is time.” Technology is an equalizer, allowing small companies to run more efficiently with fewer resources. Check out the differences among the software priorities of growing SMBs versus stagnant or declining SMBs.