[Deciphering the rapid growth of unicorns]
Last week I was fortunate to be invited to speak on a panel at Techtonic, Philippines’s largest innovation conference. The panel’s goal was to provide insights on why there is no unicorn in the Philippines. However, the crowd was most interested in “how do unicorns achieve their growth? And how do we do the same?” So here is my take on a unicorn’s growth, which comes down to ticking these three components:
- Building on a technology (platform) which is hitting massive scale: Part of being a unicorn is being able to acquire users rapidly with a large total addressable market. Without the underlying mass, even if you were able to scale quickly, you’ll run out of room for growth very quickly. Instagram was built on top of a platform(Facebook) hitting scale, thus it was able to convert existing users for their rapid growth. But how?
- Improvement on existing human(B2C) or business(B2B) behavior: To be part of the unicorn growth club, your product/service really has to be a natural progression of an existing solution and behavior. You will not be able to grow rapidly if you have to spend time teaching and educating the market. People take photos to preserve their memory, it’s been a practice that has been done for decades. Facebook educated the market on social, and by making photos look better with filters, Instagram was able to convert Facebook’s users into their own.
- Viral coefficient: No rapid growth is achieved without this last component. Essentially is the number of new customers bought in by serving one customer. It’s best if your product/service can do this organically. The Instagram API posted straight to Facebook and tagged “made by Instagram”, this allowed Instagram to effectively acquire customers at no cost, compared to the common discounted/credit practice made famous by Dropbox, later copied by Uber, Airbnb, and many others.
Although this is not the end all be all checklist for rapid growth, but it’s a good starting point to decipher the mythical growth of the unicorns. If you are trying to build a fast growing company and want to learn how, AppWorks Accelerator is now accepting applications for its next AI/blockchain only batch (AW#20). Final round deadline is 12/16 >>> http://bit.ly/35s6A8r
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by Jack An
Analyst, AppWorks
