What is a unicorn?
A unicorn is a privately held startup business valued at above $1 Billion. Venture capitalist Aileen Lee originally coined the term unicorn in 2013. He chose the fictitious animal to represent the fact that start-up companies with private capital of over a billion dollars are so rare.
According to CB Insights research, there were 1,068 unicorn companies worldwide as of 30 March 2022. 519 of which were “born” in 2021 alone.
It takes more than a great idea to build a unicorn. It takes dedication, hard work, and often a bit of luck. But most importantly, it takes Product-Market Fit. More on this shortly.
The purpose of your business is to find, sell to, and to keep customers while maximising Customer Lifetime Value (CLV). CLV is the amount of money you stand to make throughout the relationship with a particular customer.
However, the way customers find, buy, and use products and services has evolved significantly over the last decade and even more so over the last 2 years.
Some of these changes include:
- The culture of instant gratification,
- On-demand delivery,
- The subscription economy,
- The need for product and service personalisation, as well as
- The stiff global competition forcing businesses to become even more special for customers to want to buy from them.
Take the arrival of Amazon in South Africa. This means companies like Takealot and many other smaller ecommerce-based businesses will need to adapt accordingly, or fail.
And one way to adapt is to achieve Product-Market Fit.
What is Product-Market Fit (PMF)?
PMF is a fairly new concept. Marc Andreessen, the American entrepreneur and investor, defined PMF as being in a good market with a product that can satisfy that market.
At A-Game Business, we say you have PMF when you offer a unique product or service that a great market desperately wants, is willing to pay for it and has the money to pay for it.
PMF speaks to the degree to which a product or service satisfies a strong market demand and where 70-80% of your customers remain repeat customers for an extended period of time because they are delighted with your product or service.
Product-Market Fit has been identified as the critical key to building a unicorn.
But how do you do it? How do you go from a small startup or stagnant SME to a unicorn with Product-Market Fit?
This means change, in a BIG way. Change means letting go of weak business models and ineffective leadership practices. Change also means the sentiment of being ‘too busy to care about strategy’ needs to be a thing of the past.
The valuable business lesson reinforced by the Covid-19 pandemic and related digital disruption, is that the time to invest in securing the future of your business is before you need to do so – not when you are forced to do so.
Now is truly an opportune time for leaders and entrepreneurs to redefine their strategy and mindset in order to become competitive, let alone become a unicorn.
Join me live in-person or online at the 2022 SA Innovation Summit when I present the ‘5 Tactics For A 10X Growth Strategy’ masterclass and share how you can go about rebuilding your business towards unicorn status.
To your success
KK’s masterclass forms part of the #SAIS2022 Founder’s Toolkit stream; jam-packed with workshops, panels discussions and practical take outs for founders to scale your business, ride the trends and adapt to thrive.
SAIS2022 tickets are on sale and retail for R3 995 and online tickets go for R199.
Don’t miss out. Purchase your ticket here: https://innovationsummit.co.za/ticket-sales-2022/