Managed.IT - issue 55

MANAGEMENT MANAGED.IT 19 www.managedITmag.co.uk Much like Silicon Valley, London has become a hub for unicorn startups, with 45 unicorns created in the City. Not that the rest of the UK has been idle: Cambridge, Oxford, Manchester, Leeds, Bristol and Edinburgh have each created multiple unicorn startups. Data on unrealised unicorns (businesses that have reached a valuation of over $1 billion without yet selling the company) provided by dealroom.co show that the majority of current UK unicorn startups focus on finance, with growing interest in artificial intelligence. This follows the same pattern of unicorns across the globe. Notable companies that are expected to reach unicorn status in the future include hotel booking service Secret Escapes, energy supplier Bulb and Fintech disruptor Atom Bank. What makes a good unicorn startup idea? 1 They fill a need When creating your own product or service, it’s easy to get carried away believing that your product is the greatest on the market. The problem is that if nobody wants what you’re selling, all your efforts will have been in vain. Entrepreneurs succeed when they study the wants and needs of the general public, putting their own preferences to one side if they don’t align with what customers want. Blockbuster, for example, believed that Netflix was ‘too niche’ to succeed. Back in 2000, the CEO of Netflix offered the former CEO of Blockbuster ownership of Netflix for $50 million. Blockbuster declined and went bankrupt whereas Netflix is now worth billions. The companies that become unicorns are those that have ideas that will be useful to everyone, regardless of country, meaning they won’t struggle when looking to expand internationally. 2 They listen to the right people Like all things in life, there are people out there who are more experienced and have better ideas than yours. If someone with a proven track record is willing to take the time to give you advice, you should take it. Successful business owners recognise the right people to listen to, whether it’s big-picture advice or simply tips to help with fundamental day-to-day operations. 3 They are focused, committed and motivated Anyone can come up with an idea – maybe even a good one – but it takes a different breed to follow it through. No company became a unicorn with a founder who quickly lost interest or fell at the first hurdle. Steve Jobs pushed a couple of risky products in the ‘80s that didn’t pay off and was subsequently forced out of his own company. He returned years later as CEO after Apple bought his new company NeXT Inc. The reason unicorns succeed is that their owners are motivated enough to stick with their ideas through the hard times until they eventually see the fruits of their labour. 4 They are flexible and able to adapt Sticking by your project doesn’t mean you shouldn’t let it evolve. Consumer trends can change as easily as the weather, which is why businesses need to keep a close eye on their customers’ habits and be able to adapt quickly to change. Before forming social media giant Twitter, Evan Williams founded a podcasting platform called Odeo. When the iTunes store announced that it would host podcasts, Odeo became obsolete. Rather than giving up, Williams dusted himself off and started again. No unicorn startup gets it right from the get-go – they evolve with their market. Putting your pride to one side and admitting when you’re wrong is the first step to getting back on track with your business. 5 They value quality No one ever made $1 billion by selling a shoddy product. The whole premise of unicorn businesses is to create a quality product that people across the globe want to buy. If your product falls apart or your software frequently crashes, there’s no chance of expanding and gaining more custom. 6 Their scope is global The reason why unicorn startups make $1 billion? They think big. Trading internationally isn’t a new concept; in fact, it’s how businesses become unicorns. If you’re looking to sell your services globally, other countries and cultures should be at the forefront of your considerations, even if your ideas are still in conception. If you’re hoping to sell gin worldwide, you’re not going to make many sales in countries that prohibit alcohol. Even something as small as your company name could have ramifications. American tissue company Puffs didn’t do so well in Germany where the term ‘puff’ is slang for a brothel. Final thoughts As businesses have a 0.00006% chance of becoming a unicorn 3 , it’s understandable that joining the ranks may be daunting. However, it’s clearly not impossible. By following the trends in Unicorn startups, you’ll give yourself the best chance of hitting the incredible milestone. Whether it’s creating software in a more favourable market, like fintech or artificial intelligence, or simply having a good head for business and adapting your product to fit your market and expand globally, your startup could be the next name to join the ranks. 1 US Small Business Administration Office of Advocacy. https://www.sba.gov/sites/default/files/advocacy/ All_States.pdf 2 Tech Nation, Unicorn Update, London Tech Week June 2019 3 First Round Review https://firstround.com/review/ Theres-a-00006-Chance-of-Building-a-Billion-Dollar- Company-How-This-Man-Did-It/ UK unicorn Industry Year founded Years to reach $1b BenevolentAI Artificial intelligence 2013 2 Oxford Nanopore Health 2005 10 The Hut Group E-commerce & Direct- to-consumer 2008 8 Transferwise Fintech 2010 6 BrewDog Consumer & Retail 2006 11 Improbable Technology 2012 5 Deliveroo Supply chain, Logistics, & Delivery 2012 5 OakNorth Fintech 2013 4 Revolut Fintech 2014 4 Darktrace Artificial intelligence 2013 5 Immunocore Biotech 2008 7 Graphcore Artificial Intelligence 2016 2 Monzo Fintech 2015 3 Ovo Energy Energy 2009 10 Sum Up Fintech 2011 7 Radius Fintech 1990 27 Greensill Fintech 2011 7 Checkout.com Fintech 2012 5