Tales of the Magical ‘Unicorn Companies’
Think of a typical day in your own everyday life; depending on your age you’ll probably begin the morning with breakfast, perhaps some tea while logging into facebook to see what’s happening amongst your ever-expanding network of online friends. On the train to work you might escape into the sounds of your favourite new artist thanks to Spotify, whilst at the office, Google is your best friend and go-to-person for everything from choosing a venue for Friday night’s after work drinks, to querying whether your stubborn sneeze could be about to turn into something more serious. In our constantly wired 21st century age, Tech firms are taking over the word it seems and like the household names just mentioned, ‘unicorn companies’ share a lot in common – namely they are the tech start-ups which from humble beginnings grew into $1 billion+ companies. The rest is history.
What is a Unicorn Company?
The first question you may be asking is what exactly is a ‘Unicorn Company’ and how did they come to be? Quite simply a Unicorn Company is a tech start-up which over time through good management, brand recognition and most importantly – by offering customers a kick-ass experience has grown to surpass the magic $1 billion annual revenue mark. In the rarefied world of Silicon Valley they are the companies that have “made it”, the romantic tales of start-ups which have grown from a mere garage operation into globally recognised behemoths with scale, speed and serious sex appeal to an increasingly demanding global consumer class. Google (founded 1998) is perhaps the best example, as are Facebook (founded 2004), Twitter (founded 2006) and Spotify (launched 2008) to name just a few of the most obvious examples. Like their animal namesake they’re incredibly rare and spell-bindingly magic, or at least they’re supposed to be that way.
4 Signs a Company is on a Unicorn Trajectory
With the once rare “Unicorn Company” status becoming increasingly common, how can you tell which tech start-ups have the potential to grow beyond the magic $1 billion mark and cement themselves in our digital consciousness? Here’s a few telling signs you might be on to a winner:
- Willing Investors: Capital is the lifeblood of any start-up and is often as limited as it is incredibly valuable. Start-ups which manage to attract willing investors – whether they be private equity (Venture Capital, Individual Investors) or public investors (via an IPO) on a consistent basis have much better odds of making their business model work over time – cushioned from the inevitable volatility of their revenue streams.
- Growing Workforce: Most start-ups are quite capital and knowledge-intensive, meaning they require talented developers and engineers to build their IT platforms from scratch and many more to maintain those systems whilst serving customers. A start-up with a consistently growing workforce is therefore better positioned to grow its revenues by keeping ahead of market challenges and customer demands.
- Growing Revenue: Ultimately, growing revenue is the name of the game as a start-up will only go broke if it runs out of cash and can no longer pay employees or maintain its IT systems. Consistent MOM and YOY revenue growth is a solid sign a start-up is meeting customer needs and gaining valuable recognition in the marketplace.
- Online Buzz: Finally, what people are saying about a start-up online through social media or articles and the number of inbound links and mentions its website receives are important indicators of its current popularity and likely future growth prospects. A sudden drop in online buzz might indicate a cut to the marketing budget or even worse – declining interest from consumers.
Canva and the Prospect of Australia’s First Tech ‘Unicorn’
Silicon Valley may be home to the lion share of the world’s ‘unicorn’ companies, which comes as no surprise to many. But Canva – a once-small and fast-growing graphic design start-up founded in August 2013 and based in Sydney could be on track to become Australia’s first claim to $1billion+ tech fame. Armed with a seriously elegant, user-friendly web-based platform and its mission of “empowering the world to design”, Canva has grown to an impressive 2 million registered users in just under 2 years, not to mention a smorgasbord of 16 million unique design templates, 20 million uploaded images (which it charges registered users a $1 fee to use) and one new design every second. Whilst revenue figures are private, as of October 2014 the platform had managed to raise over $6.6 million in private equity. With excellent customer feedback and a growing, paying user-base, we might not have to wait too long to claim our own Aussie success in the relentless world of high tech global brands.