> 95% of businesses never become unicorns, but that's the goal for most
Is it really the general case or is it just a HN echo chamber meme?
My pet peeve is that patterns used by companies that in theory could become global unicorns are mimicked by companies where 5000 paying customers would mean an immense success
Lifestyle companies are fine, if that's what you're aiming for. I know plenty of people who run or work at ≈1-30 person companies with no intention to grow.
However, if you're going for high-growth, you need to plan for success. I've seen many potential unicorns stopped by simple lack of planning early on. Despite all the pivots which happen, if you haven't outlined a clear path from 1-3 people in a metaphorical garage to reaching $1B, it almost never happens, and sometimes for stupid reasons.
If your goal is 5000 paying customers at $100 per year and $500k in annual revenues, that can lead to a very decent life. However, it's an entire different ballgame: (1) Don't take in investment (2) You probably can't hire more than one person (3) You need a plan for break-even revenue before you need to quit your job / run out of savings. (4) You need much greater than the 1-in-10 odds of success.
And it's very possible (and probably not even hard) to start a sustainable 1-5 person business with >>50% odds of success, especially late career:
- Find a niche you're aware of from your job
- Do ballpark numbers on revenues. These should land in the $500k-$10M range. Less, and you won't sustain. More, and there will be too much competition.
- Do it better than the (likely incompetent or non-existent) people doing it now
- Use your network of industry contacts to sell it
That's not a big enough market you need to worry about a lot of competition, competitors with VC funding, etc. Especially ones with tall moats do well -- pick some unique skillset, technology, or market access, for example.
However, IF you've e.g. taken in VC funding, then you do need to plan for growth, and part of that is planning for the small odds your customer base (and ergo, your data) does grow.
> if you haven't outlined a clear path from 1-3 people in a metaphorical garage to reaching $1B, it almost never happens, and sometimes for stupid reasons
most of the business plans are clear. acquire users and/or paying customers, build out the product, raise money and eventually raise prices too.
engineering side is even simpler, keep the lights on, work with product designers to find incremental steps, iterate.
as others have mentioned upthread if a startup finds a great niche (and manages to make it a whole new market for example) they simple cannot fail due to inadequate engineering. (because worst case you fire the whole engineering department and just acqui-hire a random startup and you'll be back to growth in no time.)
of course this take might be too hot, so I'm happy to read some counterarguments (maybe there are even counterexamples?)
> they simple cannot fail due to inadequate engineering. (because worst case you fire the whole engineering department and just acqui-hire a random startup and you'll be back to growth in no time.)
> ...
> of course this take might be too hot, so I'm happy to read some counterarguments (maybe there are even counterexamples?)
Netscape's main revenue came from Navigator, right? A browser. Classic commodity. How did they fail due to engineering deficiencies? (Netscape was better than Mosaic, they invented JavaScript, there was plenty of chops there, and initially they had revenue, IPO went great ... at that point it's arguably not a startup anymore.)
And even when it failed it was worth 4.2B to AOL.
... if we're talking about browsers, Netscape's reincarnation Mozilla is again in the same tough spot. They have zero business sense, absolutely no plan, nada. At that point it's completely irrelevant how long it takes them to fix bugs or implement Web APIs or make it faster on various platforms. And still, they funded Rust and Servo.
It's definitely an echo chamber. Most companies definitely do not want to become "unicorns" - most SME's around the world don't even know what a "unicorn" is, let alone be in an industry/sector where it's possible.
Does a mining company want to become a "unicorn"?
A fish and chip shop?
Even within tech there is an extremely large number of companies whose goals are to steadily increase profits and return them to shareholders. 37 Signals is the posterchild there.
I don't see so much DuckDB and CouchDB proselytizing but the SQLite force always out strong. I tend to divide the Postgres vs. SQLite decision on if the data in question is self-contained. Like am I pulling data from elsewhere (Postgres) or am I creating data within the application that is only used for the functionality of said application (SQLite).
SQLite, in addition to just being plain popular, is a fairly natural stepping stone - you get a lot of fundamental benefits of an SQL RDBMS (abstract high-level queries, ACID etc) without the overhead of maintaining a database server.
Postgres is the next obvious stepping stone after that, and the one where the vast majority of actual real-world cases that are not hypotheticals end up fitting.
I think differently. If multiple users need to query the database directly then postgres. If no one is ever going to look at the db except one person or one application then sqllite. It's an interesting question as to whether micro services should be sqllite.
Postgres is recommended because it's free, easy to maintain, install and it's has excellent query features.
Many startups seem to aim for this, naturally it's difficult to put actual numbers to this, and I'm sure many pursue multiple aims in the hope one of them sticks. Since unicorns are really just describing private valuation, really it's the same as saying many aim to get stupendously wealthy. Can't put a number on that, but you can at least see it's a hope for many, though "goal" is probably making it seem like they've got actually achievable plans for it... That, at least, I'm not so convinced of.
Startups are, however, atypical from new businesses, ergo the unicorn myth, meaning we see many attempts to follow such a path that likely stands in the way of many new businesses from actually achieving the more real goals of, well, being a business, succeeding in their venture to produce whatever it is and reach their customers.
I describe it as a unicorn "myth" as it very much behaves in such a way, and is misinterpreted similarly to many myths we tell ourselves. Unicorns are rare and successful because they had the right mixture of novel business and the security of investment or buyouts. Startups purportedly are about new ways of doing business, however the reality is only a handful really explore such (e.g. if it's SaaS, it's probably not a startup), meaning the others are just regular businesses with known paths ahead (including, of course, following in the footsteps of prior startups, which really is self-refuting).
With that in mind, many of the "real" unicorns are realistically just highly valued new businesses (that got lucky and had fallbacks), as they are often not actually developing new approaches to business, whereas the mythical unicorns that startups want to be are half-baked ideas of how they'll achieve that valuation and wealth without much idea of how they do business (or that it can be fluid, matching their nebulous conception of it), just that "it'll come", especially with "growth".
There is no nominative determinism, and all that, so businesses may call themselves startups all they like, but if they follow the patterns of startups without the massive safety nets of support and circumstance many of the real unicorns had, then a failure to develop out the business proper means they do indeed suffer themselves by not appreciating 5000 paying customers and instead aim for "world domination", as it were, or acquisition (which they typically don't "survive" from, as an actual business venture). The studies have shown this really does contribute to the failure rate and instability of so-called startups, effectively due to not cutting it as businesses, far above the expected norm of new businesses...
So that pet peeve really is indicative of a much more profound issue that, indeed, seems to be a bit of an echo chamber blind spot with HN.
After all, if it ought to have worked all the time, reality would look very different from today. Just saying how many don't become unicorns (let alone the failure rate) doesn't address the dissonance from then concluding "but this time will be different". It also doesn't address the idea that you don't need to become a "unicorn", and maybe shouldn't want to either... but that's a line of thinking counter to the echo chamber, so I won't belabour it here.
Is it really the general case or is it just a HN echo chamber meme?
My pet peeve is that patterns used by companies that in theory could become global unicorns are mimicked by companies where 5000 paying customers would mean an immense success