The idea of the unicorn was coined in a TechCrunch article in 2013; it referred to tech startups valued at more than $1bn and they numbered around 40 at the time. Their number grew into the hundreds, but then the herd thinned out and people started to ask if it was all a bubble.
I have always thought that a billion dollar valuation is not the most important way of looking at a company. Sure, its a huge number and who wouldnt want to join the Unicorn Club? But valuation isnt the goal, its just a reflection of success. I prefer to look at long-term potential to guarantee long-term growth, a tech start-up has to define and dominate a product category, not just for a year or two, but for a decade.
To be successful, any business has to ask itself three questions: Do you have a unique selling proposition? Would you leave a hole in the market if you werent there? Are you committed to continuous improvement?
The challenge for any Unicorn is that it can be a stock market darling one year, but old news the next. Tech is going beyond data and getting back into the physical world 3D printers, for example with new levels of individual creativity, empowerment and innovation. But picking winners and losers is difficult. I am excited by the potential of driverless cars, but no one can guarantee which companies will ultimately dominate this sector.
The capital gap for start-ups remains a challenge; the Silicon Valley culture leads the way, and the UK venture capital and private equity market remains strong, but I am most excited by the growth in Indian venture funding. The potential there is almost limitless.
However, wherever in the world you are starting a business one thing is the same the world over creating something new does not necessarily happen according to the needs of a five-year fixed investment fund so you need to find backers prepared to think imaginatively and who are in it for the long term.
And, for venture capitalists, one thing is also the same the world over: great people make great businesses. Find great people, support them and empower them and you could find one day the unicorn is no mythical creature; youve helped create its modern-day equivalent.
