Have you ever wondered how some companies grow from nothing to worth billions?
These businesses, called unicorns, follow smart strategies that help them grow fast, avoid mistakes, and beat their competition. But what if you could learn and use these secrets for your success?
In this blog, we will uncover the 5-step formula that top companies like ByteDance, Stripe, and Discord use to achieve massive growth. Whether you're a startup founder, a student, or an entrepreneur, these steps can guide you to turn your ideas into a billion-dollar success story.
Let’s start this journey!
5 Proven Steps Unicorns Do to Avoid Trial and Error in Business
Building a unicorn growth business (a company worth more than $1 billion) might seem impossible, but successful companies share some smart strategies. They don’t just rely on being innovative; they avoid wasting time and money on trial and error.
Following their steps can grow your business, keep customers loyal, and lead the market, even with limited resources.
Let’s explore the simple strategies used by unicorns like ByteDance (TikTok), Stripe, and Discord, and how you can apply them to your own business.
1. Embrace a Data-Driven Culture
A data-driven culture means making decisions based on facts, numbers, and trends instead of guesswork or personal opinions. Unicorns like ByteDance, the company behind TikTok, rely on advanced technology to study how users behave.
This approach not only drives innovation but also helps in building scalable business models that adapt to changing user preferences and market demands.
Example: ByteDance (Owner of TikTok)
- ByteDance employs advanced machine learning algorithms to analyze billions of user interactions daily. TikTok leveraged 107 million social shoppers to drive billions in revenue through TikTok Shop. Social commerce sales are expected to grow from $67 billion in 2023 to $144.5 billion by 2027, according to eMarketer.
- For instance, TikTok collects data on what videos users like, share, and watch the most. This information shows content that keeps people engaged, helping TikTok grow rapidly and become one of the most valuable companies globally.
How You Can Apply It:
- Start using free or low-cost tools like Google Analytics or Mixpanel to track how people interact with your website or app. These tools are a key part of startup strategies, helping you identify what is working and what needs improvement.
- Create simple surveys to understand what your customers like and what problems they face. You can use tools like Google Forms or SurveyMonkey to do this.
- Look at the data regularly and make changes to your product or service based on what the numbers tell you. For example, if people aren’t buying a certain product, try improving it or marketing it differently.
By using data, you can make smarter decisions that save time and money. You’ll know what your customers want instead of guessing, which helps you grow faster.
2. Solve a Niche Problem with Scalable Solutions
A niche problem is a specific issue faced by a group of people. For example, Stripe noticed that businesses were struggling with online payment systems because they were too complicated. Stripe made simple tools (called APIs) that let businesses easily accept payments online.
This solution was not only helpful but also scalable, meaning it could work for small businesses, large companies, and everything in between. Today, Stripe handles billions of dollars in transactions and is one of the most successful companies in the world.
Example: Stripe
Stripe identified a specific inefficiency: complex online payment systems. By simplifying this with their APIs, they empowered businesses worldwide, processing $640 billion in payments annually and reaching a valuation of $50 billion.
This solution wasn’t just helpful, it was also scalable, meaning it worked for small startups, large companies, and everything in between. Today, Stripe is one of the most successful companies in the world.
How You Can Apply It:
- Identify a specific problem in your field. For instance, if you are in the food delivery business, ask yourself: what do customers or restaurants struggle with the most?
- Create an MVP, or minimum viable product, which is a fundamental form of your solution. It only needs to address the main issue; perfection is not necessary. If you're making an app, for instance, start with the most important functionality first.
- Make sure your solution can grow as your business grows. For example, if you’re creating a website, ensure it can handle more visitors as your business expands. Scalability is a crucial element of startup growth strategies, enabling long-term success.
By focusing on a niche, you avoid competing with too many businesses at once. A scalable solution means you can serve more customers over time without starting from scratch.
3. Build a Loyal Community
A loyal community is a group of people who trust and support your brand. Unicorns like Discord are excellent at building communities. Discord started as a tool for gamers, and they actively listened to user feedback to make the app better.
Over time, this focus on community helped Discord grow beyond gaming to include other groups like students, professionals, and hobbyists.
Example: Discord
- Discord started as a platform for gamers, focusing on building tight-knit communities by prioritizing user feedback. By listening to its users and making continuous improvements, Discord expanded its audience to include students, professionals, and hobbyists. Today, it has grown to 150 million monthly users and a valuation of $15 billion.
- This strong connection with users allowed Discord to grow beyond its original purpose while keeping its core community engaged.
How You Can Apply It:
- Start by connecting with your first customers through social media, emails, or direct messages. Ask for their thoughts and suggestions.
- Create spaces where your users can connect. For example, start a Facebook group, a WhatsApp community, or even a forum on your website.
- Show your customers that their feedback matters. If they suggest an improvement, try to implement it and let them know. This builds trust and makes them feel valued.
A loyal community not only keeps coming back to your product or service but also spreads the word to others. This helps you grow without spending too much on advertising.
4. Innovate for Cost Efficiency
Cost efficiency means finding smart ways to save money while achieving the same or better results. For example, SpaceX reduced the cost of launching rockets by creating reusable ones.
Instead of throwing rockets away after one use, SpaceX designed them to be used multiple times, saving millions of dollars. This innovation made them the leader in space exploration.
Example: SpaceX
- SpaceX transformed space exploration by developing reusable rockets. Instead of discarding rockets after one use, they designed them to be used multiple times. This innovation cut launch costs from $25,000 per kilogram to just $2,720 per kilogram. This cost-saving helped them get long-term contracts and reach a valuation of $137 billion.
- By saving costs without compromising on quality, SpaceX became a leader in the aerospace industry.
How You Can Apply It:
- Look for tasks in your business that are repetitive and can be automated. Tools like Zapier or HubSpot can help automate emails, reports, or customer follow-ups.
- Partner with other companies or organizations to share resources. For example, if you’re a small clothing business, partner with a local printer to save on packaging costs.
- Think about long-term savings. Invest in tools or systems that may cost more upfront but save you money in the long run. For example, buying energy-efficient equipment or switching to digital tools instead of paper-based ones.
When you save costs without cutting quality, you can invest that money into growing your business. Being cost-efficient also gives you an advantage over competitors who may be spending more.
5. Offer Freemium Model
A freemium model means offering a free version of your product with basic features while charging for advanced features. For example, Miro, a digital whiteboard tool, gives users free access to its basic tools.
Once people enjoy the free version, many upgrade to the paid version for more features. This strategy helped Miro attract millions of users and grow into a multi-billion-dollar company.
Example: Miro
Miro, a popular digital whiteboard tool, used the freemium model to attract millions of users. They offered free collaboration tools that were simple yet effective for teams. As users found value in the platform, many opted for the paid version to access advanced features.
This strategy converted 30% of free users into paying customers, helping Miro reach a valuation of $17.5 billion through its freemium-to-premium approach.
How You Can Apply It:
- Think about which features of your product or service you can offer for free. For example, if you’re creating an app, you could provide basic functions for free.
- Create premium features that solve more complex problems or save users time. These features should be good enough to make people want to pay for them.
- Use the free version to build trust and attract more users. Once people see the value, they’re more likely to upgrade to the paid version.
The freemium model lets you reach a wide audience quickly without scaring people away with high prices. It also builds a steady flow of paying customers over time.
Key Takeaways for Founders
1. Start Small, Think Big
- Unicorns like Stripe started by solving small but specific problems, such as simplifying online payments, before expanding their reach globally. This approach allowed them to focus on quality and build a strong foundation.
- As a founder, tackle one key issue in your market, then gradually grow your business to serve a larger audience.
2. Leverage Technology
- Technology can save time and money by automating tasks and analyzing data. Use tools like Google Analytics or Zapier to understand your customers and improve efficiency without spending too much.
- Stay updated with the latest trends so your solutions remain innovative and relevant in a changing market.
3. Prioritize Customer-Centricity
- Understand what your customers need and create solutions around their preferences, just like Discord did by listening to its users. Personalize their experience and keep communication open and honest to build trust.
- Happy customers are more likely to stay loyal and recommend your product to others.
4. Innovate for Sustainability
- Focus on long-term savings and growth by investing in smart solutions, like SpaceX’s reusable rockets, which cut costs significantly. Think about ways to improve how your business operates while also growing your revenue.
- Efficiency and sustainability can help your company thrive for years to come.
5. Test and Iterate
- Start with a basic version of your product, called an MVP, to see how the market reacts. Gather feedback, improve your product, and test again until it meets customer expectations.
- Using strategies like a freemium model can help you test your ideas without spending too much initially.
Key Benefits for Implementing These Steps
1. Minimized Risk
- When you use data and proven methods, you make smarter decisions that reduce costly mistakes. Instead of guessing, you rely on facts and trends to guide your actions. This approach saves money and time, helping you avoid unnecessary trial-and-error efforts.
2. Faster Growth
- Targeted strategies focus on what works best for your business, helping you grow faster. By putting your time and money into areas with the most impact, you achieve better results. This ensures you use your resources wisely while scaling your business effectively.
3. Stronger Customer Loyalty
- When you build a community and listen to customer feedback, people feel valued and trust your brand. Acting on their suggestions shows you care about their needs, which makes them stay loyal. Loyal customers not only return but also recommend your product to others, boosting growth.
Conclusion
Unicorn strategies achieve success by avoiding trial-and-error approaches and relying on proven strategies. The steps outlined here are embracing data, solving niche problems, building communities, innovating cost-efficiency, and offering freemium models a roadmap for navigating challenges in any business.
By scaling these practices down to your resources, you can create a foundation for sustainable growth. Remember, it’s not about replicating unicorn success but adopting their best practices for your unique journey.
Ready to take your first step toward building your own success story?
Let’s connect and explore how you can implement these strategies today. Stay tuned for more insights and actionable tips-see you soon!
