Unicorn Startups – A goal or a mere status

Every founder while founding a startup has a dream in his mind that one day they think will be achieved. Most founders see this happen when their startups achieve the acclaimed unicorn status. What is a unicorn status you ask , well any startup whose valuation crosses the $1 billion mark is given unicorn status. But is just being a unicorn sufficient for a company to survive? Let’s find out.

By unicorn one is simply referring to the valuation of the company and nothing else – not the revenue , not the profits just the valuation. There are several instances where an extremely high loss making company can be a unicorn and profit making company is not but that’s just how it works. Now, don’t forget that these valuations don’t mean that your company is failure proof; a unicorn has just as high chance of failure than a non-unicorn company. Hence the question – is it a mere status?

Well we can’t just differentiate it as black and white, we have to look between the colors here. Let us start with an example – a case of a well funded startup which became a unicorn quickly and a bootstrapped startup.

Quibi a streaming startup founded in August 2018 by renowned Hollywood producers Jeffery Katzenberg and Meg Whitman as a platform to launch short-form content for mobile services. One of the fastest startups to become a unicorn, Quibi quickly generated a funding of $1.75 Billion and launched its streaming service by April 2020. Do you know what is the situation of Quibi right now – DEFUNCT. Yes, one of the fastest startups to become unicorn is now defunct and was shutdown within six months of its launch.

Now let’s talk about another startup, this time an Indian bootstrapped startup { bootstrapped – run by founders own money without any external funding} called Zerodha. Zerodha a stock broking company which was launched in 2010 by the then unknowns Nikhil and Nithin Kamath provided stock-broking services online anywhere in India. Situation of Zerodha you ask right now – It is one the most successful Indian startups and the most used stock-broker in India as of now with more than 5+ million users as of 2020. Although launched in 2010 Zerodha only became a unicorn in June 2020 with a self-assessed valuation of over $1 Billion.

The lesson from the above story – being a unicorn doesn’t guarantee success. If you have the right product and the right mindset you can bootstrap your way to success and if you don’t have the right idea you can receive all the funding in the world but still won’t be able to make it.