The formula for billion-dollar startups

I love working with startups. Entrepreneurship is inspiring in all its forms, and working with founders will often open up your team’s creativity to all kinds of new and exciting possibilities.

Yet, despite the entrepreneurial enthusiasm you’ll find in nearly every startup, there’s always a clear delineation between those companies that simply get you excited and those that will go on to create billion-dollar enterprises.

So, what is the difference? And what does it take to create a unicorn-level success?

I’ve pondered these questions for years. And after much consideration and more than a few successful investments of my own, I’ve found these five qualities—what I call the “ALICE” method—to be present in every successful unicorn company.

‘A’ for attitude

Perhaps the most important defining quality of successful startups is a can-do attitude that’s user-centric, agile, and completely unconstrained by the past.

A unicorn business always moves quickly to meet its users’ needs. But more than that, they actively listen to the market and to their trusted advisors, maintaining a willingness to course correct or even fully pivot at a moment’s notice. 

Unfettered by an entrenched corporate culture that’s bent on telling you what can’t be done, the unicorn is also seemingly fearless about taking big swings. The focus is on disrupting a market with what’s possible, which in turn leaves the doors open to a world of opportunities.

This inherent optimism, along with the grit and determination to change the world, are essential qualities. From the founders down to the shipping clerk, having a team that is convinced of their collective ability to succeed defines the unicorn.

‘L’ for leadership

An attitude of success begins at the top. But for a true unicorn startup, this belief in success must be akin to religious fervor—with its leaders acting as high priests.

Defining the company’s vision and brand is just the first step on the journey. To have any hope of reaching the rarified air of a startup legend, leadership must also wholeheartedly embrace this vision and become living examples of what it means to be a valued team member.

From committing the company roadmap to memory to celebrating each new success to wearing the company T-shirt, a strong and fully invested executive team is a key component of the successful startup.

‘I’ for incentives

When we hear the word “incentives,” our first inclination is to assume we’re talking about money. And certainly, money plays a role in any employee’s decision to join a startup.

But what differentiates a unicorn from the pack is how it creates a constant stream of motivating incentives that go far beyond financial rewards.

The average employee today is seeking more meaning and purpose from their job than ever before. Whether they’re looking to reimagine what your product can do or looking to affect social concerns in their community. Employees are searching for reasons to believe their job is having an impact and making a difference.

This is why the unicorns of the world seek to incentivize employees by creating pathways toward reaching their goals. In a way they create both a financial and emotional sense of ownership that keeps the entire team delivering their best work day after day.

‘C’ for consistency

A strong identity is a must for any business. But for a company on a path to a billion-dollar valuation, a consistently strong and differentiated brand can sometimes be the tipping point between a wild success and a mid-market poser.

The important thing to remember is that the brand is more than just a function of marketing. A truly strong brand defines the entire business.

How a product looks and functions should be guided by the brand. How you interact with employees should be guided by the brand as well. In fact, the more the brand is applied to the organization, the more consistent the company identity becomes.

It all comes down to creating a consistently positive experience at every touch point within the company, so that users implicitly and explicitly begin to understand the vision of the company and how it can make their lives better. This is how a unicorn distinguishes itself.

‘E’ for empowerment

Perhaps one of the most important, yet also overlooked, elements of startup success is employee engagement. 

Employees are a company’s strongest sales asset. But if you don’t empower them with the time, space, and freedom to do amazing things, they can wind up feeling unmotivated and directionless.

When a company puts trust in its employees, though, it can become an endless source of inspiration. They can more easily find their purpose and place within the organization. And it turns them into advocates for the cause.

This is how the unicorn becomes something truly special in the minds of its fans and advocates.

Some final words

Certainly, there are other qualities that come into play, specific to each company. Further, these elements don’t guarantee that a startup will rise to a unicorn level, nor ensure a business won’t fail. After all, there are simply too many other variables affecting this—from market conditions to how usable the product can ever become, and beyond.

However, it is interesting that every successful unicorn that I’ve ever seen displays at least some measure of all these qualities. So, if you even want a chance of reaching the heights of unicorn status, it’s probably a good idea to start with these basic points as you bring your startup to life.

Tim Ringel is founder and group CEO of Meet The People

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