Milestones offer an opportunity to approach the future with a renewed sense of purpose
In the past eight months, five Indian startups—Bigbasket, Delhivery, Dream11, Ola Electric and Rivigo—have become unicorns, or companies with a valuation of $1 billion or more. While valuations make headlines, it’s not the only thing founders focus on. An acquaintance explained this while sharing key lessons from her entrepreneurial journey at a recent event, and stressed on the importance of being obsessed with the customer, not the valuation.
While a billion-dollar valuation is definitely an indicator of success, what founders do after becoming unicorns is perhaps even more important than what they did to get there. That is the stage at which companies can either establish their market leadership or wither away as a result of complacency, negligence or misguided strategy.
There are six things startup founders need to be mindful of once they achieve important milestones.
Notes on success
First, competition is for losers. In Zero to One: Notes on Startups, or How to Build the Future, Peter Thiel explains the ultimate goal of a company is to become a creative monopoly. Quoting Tolstoy’s Anna Karenina and contextualizing it for a business setting, he says all happy customers are different. Each one earns a monopoly by solving a unique problem. All failed companies are the same: they failed to escape competition. Basically, the more we compete, the less we gain. Future unicorns should try and explore synergies. Competing with each other on similar value propositions is unlikely to work.
Second, reflect on your reason for being. Startups, even when they become unicorns, exist to present unique solutions to big, hairy challenges. Milestones offer an opportunity to collectively take a pause as a team, celebrate success and regroup to approach the future with a renewed sense of purpose. It is time to ask yourself—why do you do what you do and how can you do it better.
Third, conduct a pre-mortem. It is managerial strategy that encourages founding teams to visualize impending failure and work backwards to prevent it. Pre-mortems are a way to identify reasons that could prevent companies from meeting their goals and avoid obvious, often ignored mistakes. While it may seem odd to visualize failure right after becoming a unicorn or getting a huge round of funding, doing so might help avoid getting swayed by media affirmations and competitor dynamics.
Fourth, hit refresh. It is time to recalibrate your goals. Your business could be starkly different today than when you started. The skills required to build a company from scratch are different from the skills required to mature and scale. Conduct a thorough assessment of your future readiness. Retain the soul of your company but weed out stuff that no longer makes sense today. There is not much room for nostalgia.
Fifth, strengthen relations with old partners. No matter how big and powerful you become, you do not want to alienate those who got you here. Being an ethical, fair partner offers a long-term advantage. Thanks to our connected society, both good and bad news spreads like wildfire. You want to be known for your consistency and fairness, not as someone who abandons those who paved way for your success.
Sixth, focus on organizational culture. Lip service is not enough. Major milestones are accompanied by challenging targets from investors and board members. In many cases, it leads to the creation of a toxic work culture, where rules are bent, numbers are fudged and screaming at each other becomes the norm. Last year, I met an entrepreneur whose TED talk on empathy has been watched millions of times. As I waited in the reception area, I could overhear a shouting match going on in the adjacent meeting room for 30 minutes. I learnt from a friend who worked there that the famous entrepreneur was known for terrorizing his staff and calling them names if things didn’t go as planned.
Building a startup isn’t only about creating financial value but also about fostering great places for people to come together, collaborate, innovate and work. Utkarsh Amitabh is founder of Network Capital, a global peer mentoring community and a WEF Global Shaper.