Attaining unicorn status can be incredibly difficult. While many startups aspire toward unicorn status, only a few achieve it. Unicorn companies often need to scale quickly to meet the demands of their rapidly growing customer base. But it requires a lot of resources and infrastructure to support the growth.
To achieve this level of success, startups need a combination of strong financial performance, innovative products or services, and a favorable market environment. Drift co-founders David Cancel and Elias Torres share their insights on steering a company to a $1 billion valuation.
Lesson 1: Everything is about your team
Every startup needs strong team dynamics to pull through tough times. It’s all about the team 99% of the time and 1% product and process. Without great teamwork, business productivity is next to impossible to achieve.
Yet, scaling a company isn’t always about hiring more people. It’s about enabling the people on your team to be more productive and efficient.
“Help your team understand their strengths and weaknesses and how they can complement each other.” – David Cancel
Lesson 2: Don’t be afraid to venture into uncharted territories
When building a startup, you have to embrace a “No Plan B” mentality. Fully commit to the success of your business venture by not having a fallback plan or an alternative option. Give it everything you have every single day. Don’t consider failure as an option.
Don’t be scared to explore new markets. It can lead to innovative ideas and products, helping your startup stay ahead of the curve and attract new customers. After all, venturing into uncharted territories can provide businesses with valuable learning experiences.
Lesson 3: It isn’t about focusing on the idea
While a good idea is essential for a startup, it isn’t the only factor determining success. Instead of starting with an idea, look for a shift in the world.
The most important question to ask yourself is, “why now?” Startups often face unexpected challenges along the way; a good idea alone isn’t enough to overcome these obstacles. What’s more important than anything else is execution, adaptation, and the ability to pivot.
Lesson 4: Hire people smarter than you
Start with finding a great co-founder. A great co-founder will share your vision and goals for the business and will be just as committed to making it a success as you are. Starting a business is a huge undertaking. Having a co-founder to share the workload with can make it more manageable.
When considering hiring for initial positions, it’s vital not to rely solely on intuition. Instead, conduct thorough reference checks and recruit more qualified candidates to interview. During the interview process, make an effort to clearly understand the candidate’s qualifications and fit for the role.
Lesson 5: Find investors who act as partners
Ensure you attract investors who align with your mission and vision. Having investors who align with your mission and vision can lead to a more harmonious relationship between the company and the investors, ultimately leading to a more positive outcome for all parties involved.
“When investors align with your core values, they’ll have a deeper understanding of the goals you are trying to accomplish.” – David Cancel
Lesson 6: Pivoting isn’t a bad thing
It may take you a few years of experimentation and pivots, as it did for Drift. As much as you’re trying to address the biggest problem in the market, the market may change over time, requiring you to pivot to stay relevant and competitive.
Listen to the market, talk to the customers, and check for the competition. Once you follow that process, it’ll be much easier to understand whether you’re doing the right thing.
Lesson 7: Don’t fear incumbents
Don’t be afraid of having competition. Competition means there’s a market for your product. You have to find a way to re-segment a market to create your own blue ocean out of that red ocean.
Pay attention to creating a market and figure out how you can stand out in that market. By standing out in the market, a startup will be more likely to attract and retain customers, resulting in enhanced growth.
Lesson 8: Win on brand
In a saturated market, you can’t win on features alone. You have to win on brand. A well-developed brand can communicate a company’s values and appeal to customers who align with those values.
Different stages of the market require different strategies and approaches. Therefore, it’s important to understand what stage of the market your company is in and make sure you build for that.
Lesson 9: Win on audience
Consider the audience you can build for. Think about the specific customers you want to target and how you can effectively communicate with them. This can include creating content that appeals to the target audience, using the proper channels to reach them, and building a strong brand that resonates with them.
In short, build everything you can, like podcasts and events, around the initial set of audience and early fans.
Lesson 10: Don’t solely focus on valuation
Unicorn status is a nice validation, but keep your focus on growing a successful company. Building the company and finding the right people are often the most enjoyable.
Be patient to see the growth. It isn’t an overnight success. Have the right principles in place and live by those principles throughout your journey. Getting caught up in the desire for quick success and immediate results is easy, but true growth takes time and effort. It took Drift 7 years to reap the benefits of their hard work.
No journey to a $1 billion valuation is a straight line. The path to achieving a $1 billion valuation is often filled with obstacles, challenges, and unexpected twists and turns. Startups should undergo a lot of experimentation, adaptation, and changes before reaching a stage where they could be valued at a billion dollars.
SaaS markets are saturated. Aim to ride the momentum, create a better product, and build a better brand.