Turning fast-growing startups into unicorn companies is a big success because it comes with multiple possibilities, such as: having access to financial support, achieving compelling numbers, hiring the best talents, developing the best products, boosting sales in the market, and more.
Yet, undeniably, these possibilities also carry multiple challenges that might be overwhelming and that, without suitable strategies and focus, the startup’s growth could start to hinder.
In this article, we will guide you through the precautions and steps that will lead your startup into steady growth and achieve unicorn status.
Related: Processes For Scaling A Successful Startup
Defining Fast-Growing Companies
According to Eurostat-OECD, companies whose standard annualized growth is more than 20% every year for three years in a row are considered fast-growing companies.
Growth can be defined by the gross revenue of the organization, or by the number of employees it has at the start of the growth period. This means that a growing company delivers noteworthy positive funding and keeps investing it back into the business to expand the company.
Characteristics of Rapid Growth Companies
To help you maintain the steady growth of your startup, we have examined the practices that characterize booming rapid-growth companies.
- Before grabbing the apparent opportunities, rapid-growth companies analyze the possible risks to be mindful of potential outcomes.
- Rapid-growing companies have better strategic approaches as they always anticipate the changing trends of the market.
- Many fast-growing firms find that working on a low margin, for a considerably long-time act, is a barrier to achieving growth goals.
- Instead of restricting the company to one part of the market, rapid-growth companies generate new products to reach new markets and achieve their growth potential.
Related: Camel Startups And Their Advantages In Times Of Crisis
Why is it so hard to keep a rapid pace of growth?
The rapid and steady growth of a business is indeed a chance to pursue new opportunities for fast growth, but holding a rapid growth pace becomes exhilarating past a certain point.
Although it is easier to consider the reason for the decelerated growth is the saturated market, the problem lies elsewhere. According to research carried out by McKinsey & Company, a large percentage of executives of fast-growing companies overlook the problem of making the proper adjustments on time and fail to use the resources effectively.
Sometimes, businesses need to adjust their internal capacities to the changing market trends and continuously reevaluate their growth potential, and while executives fail to face these challenges, the startup’s growth starts wavering.
Becoming a Unicorn
Turning your fast-growing company into a unicorn with a valuation of $1 billion or more is not an easy task, therefore we have listed the most crucial aspects that you need to consider to achieve this milestone.
Balance Between Growth and Efficiency
Most scale-ups focus on growth when their funding increases and on efficiency when the capital declines, but to achieve unicorn status, it is imperative to strategically focus on achieving a balance between growth and efficiency.
Unicorns are growth-driven, and the main obstacle to overcome to acquire this status is achieving a balance between growth and efficiency because your objective should be to keep growing your company and providing value to consumers with a solid structure that scales throughout the years.
Overall, you need to keep in mind that the global financial state of the company determines how the efforts and resources are distributed, therefore, it will have a toll on the balance between growth and efficiency.
Product Expansion
Product expansion has proved to be an effective strategy to grow revenues, increase market share and reduce risks. The truth is that a single product will not be able to support a business in the long run because chances are that competitors will always be there to create a cheaper, quicker, or even superior overall offering.
Therefore, product expansion is advantageous for growth prospects as it maximizes the potential of your current consumers, increases your market share, helps your company to enter new markets and reach a new customer base, and increases customer loyalty.
To effectively expand your product reach, it’s critical to consider the needs of your customers, the new standards, and the distinctions of the target market.
Geographic Expansion
Geographic expansion is about outstretching and extending your operations to new locations.
While selecting your next market instead of targeting an extensive but unfamiliar one, start your expansion with a reachable and familiar market. This approach will help your company to develop a strategy for completing sustainable operations and shields it from state-specific financial downturns.
Although the geographic expansion is challenging and involves risks and challenges, at the same time, it also ensures the promising growth of your scale-up by offering a fascinating path and access to new markets and customers.
As technology will drive innovation and efficiency in business in the upcoming years, businesses need to remember that the main goal is not to become a unicorn startup, but to produce something that pushes innovation, creates new opportunities, and adds value to the market.