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.
3. Unicorn companies use AI to innovate
Speaking of technology, research shows another big difference in AI adoption and use. Compared to declining SMBs, growing SMBs are 54% more likely to say they’re ready to use artificial intelligence — and 45% more likely to already use it. Among those already using AI, the top use cases are lead prioritization for sales, automated chatbots for customer service, and predictive audiences for marketing. And those growing SMBs always seem to be preparing for the future; their top anticipated uses for AI include automatic recommendations for customers and predictive sales forecasting.
Many of those unicorn companies — particularly the business-to-consumer (B2C) ones — are proud early adopters of AI. As Splash CEO Ben Hindman says, leading companies are “always looking for solutions and they’re willing to do things differently to get better results.”
That’s where AI comes in handy, and the innovative uses are as varied as the unicorns themselves. Looking at a few of our Salesforce SMB unicorn customers, for example, DoorDash uses AI to rock logistics, while InVision’s product includes an AI assistant. Convoy uses AI to revolutionize the trucking industry, and Kabbage uses it to disrupt banking and loans. Growing SMBs like these have been quick to adopt machine learning to stay on a trajectory of innovation.
Anatomy of a unicorn business
To succeed, small businesses have to find the right mix of product strength, market demand, sustained innovation, and company management. Grab a copy of the latest SMB Trends report from Salesforce Research to see more data and statistics like these on how your small or medium business can achieve wild growth. Who knows: Maybe your company will be the next one to achieve that magical unicorn status.
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Republished by permission. Original here.
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And it’s okay to not want to be a unicorn business too. What would we call a business that is profitable enough for the owner to make a living and pay all the employees fairly?
There is a reason why they are called unicorns. It is because they are able to solve a problem that cannot be done by others. You need to have an amazing idea to begin with.