What is a Unicorn?
A 'unicorn' in business is a privately held startup company that reaches a valuation of over $1 billion. This term, popularized by venture capitalist Aileen Lee in 2013, highlights the rarity of such successful companies. Examples include BYJU’s, Swiggy, and OYO Rooms in India. As of March 2022, there are over 1,000 unicorns worldwide, known for their innovation and rapid growth.
How Unicorn Works
A unicorn works by providing a unique value proposition to its customers, investors, and partners. A unicorn typically has a scalable business model, a large market opportunity, a strong competitive advantage, and a visionary leadership team. A unicorn also works by constantly innovating and adapting to altering customer needs and market conditions. A unicorn strives to achieve profitability and growth while also forming a positive social and environmental impact.
Why Do Unicorns Matter?
Unicorns matter in the business world for several reasons, impacting both the entrepreneurial ecosystem. Here is why unicorns matter:
1. Symbolic of Success and Potential: Reaching unicorn status signifies a rare level of success for a startup. This achievement attracts attention and inspires aspiring entrepreneurs by demonstrating the potential for explosive growth and lucrative outcomes.
2. Attracts Investment and Talent: Unicorns often become magnets for further investment due to their established track record and promising future. This access to capital allows them to scale rapidly and potentially dominate their market. Additionally, their success attracts top talent, further fueling their growth potential.
3. Drives Innovation and Disruption: Many unicorn companies are built on innovative ideas and disruptive business models. Their success paves the way for further innovation within their respective sectors, pushing established players to adapt and potentially shaking up entire industries.
4. Creates Economic Impact: Unicorns often generate significant employment opportunities and contribute substantially to economic growth. They may also stimulate ancillary businesses and infrastructure development, leading to broader economic benefits.
5. Global Benchmark and Inspiration: The existence of unicorns acts as a global benchmark for success in the startup world, showcasing what can be achieved with the right combination of innovation, execution, and market fit. This can inspire entrepreneurs across the globe to pursue ambitious ventures.