How To Build Unicorn Tech Startups with Sramana Mitra
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The 1Mby1M Methodology is based on case studies. In this course, Sramana Mitra shares the tribal knowledge of tech entrepreneurs by giving students the rare seat at the table with the entrepreneurs, investors and thought leaders who provide the most instructive perspectives on how to build a thriving business. Through these conversations, students gain access to case studies exploring the alleys of entrepreneurship. Sramana’s synthesis of key learnings and incisive analysis add great depth to each discussion.
As I think about where future unicorns are likely to be, what trends present the characteristics of opportunities that can scale to that extent, I have a few observations.
I have had the opportunity to discuss these observations with a number of thoughtful industry leaders, and this course synthesizes some of those conversations.
If you review the types of companies in this course, they span a few specific industry sectors: Cloud / SaaS (Marketo, ServiceNow, Concur, Zoho, eClinicalWorks, RightNow, SuccessFactors), Big Data (Tableau), E-commerce (Eventbrite, MercadoLibre, Flipkart), Vertical Search (Kayak, Trulia), Healthcare IT (AthenaHealth, eClinicalWorks), etc.
Of these, Cloud / SaaS is a mature market. Both horizontal business applications and vertical business applications are maturing. New opportunities tend to come from discontinuities, and mature markets don’t necessarily present those. That begs the question: where are the discontinuities? The best answer to think question comes from the dynamics of small businesses consuming technology at a much faster clip than before. For every enterprise cloud app, you could, conceivably, have an equivalent offering for the small business market. Marketo, for example, is interested in larger customers, you could build an equivalent product and sell it to the low end of the market.
Mobile / Smartphone penetration globally is a major discontinuity, so consensus is that there will be new opportunities in this realm. Uber is an interesting example of a mobile app that is essentially a front-end for calling cabs and limos efficiently. Currently, there is a frenzied search among entrepreneurs and investors for the next Uber-style mobile app that offers a hybrid between an online and an offline service – transportation, in Uber’s case.
In fact, the convergence of mobile and cloud is an area worth exploring as well, especially for apps that take advantage of the geo location capabilities of mobile devices.
Less frenzied is an area that I believe has a lot of discontinuity, and a great deal of opportunity, although it is an operationally complex category. Similar to AthenaHealth, business services that not only provide cloud software, but actually outsources an entire business function – SaaS-enabled BPO – is one that I am bullish about. Especially, when you look at the current trend of modular, ultra-light small businesses, where solo entrepreneurs build $5 million revenue businesses by outsourcing EVERYTHING, it is easy to see that there will be entrepreneurs catering to this trend.
Similarly, Big Data is a very hot sector right now, and there too, I expect to see large companies emerge who will not only provide software, but also services. Many Big Data offerings are extremely complicated to use. Customers buy them, but then, use only 10% of its full range of capabilities. Why buy a Ferrari if you are going to drive it like a Toyota? Perhaps, the answer lies in offering the drivers as well, not just the cars. Or, to extend the metaphor further, driverless cars may be the holy grail of big data and machine learning!
E-commerce, although mature, continues to be an area rife with opportunities. One of the largest in this area is online fashion, a gigantic industry that is yet to fully feel the shift into e-commerce. It is becoming dramatically cheaper to build new brands starting with an e-commerce specialty store with a differentiated user experience, interesting merchandising, personalization, use of mobile shopping capabilities, etc. I fully expect to see Unicorns emerge in this corner of the digital universe. As an entrepreneur who started one of the first online fashion companies on the Internet back in 1999, I am watching this space with great interest.
Also, the global opportunities are significant today, which is why I included Flipkart and MercadoLibre. Entrepreneurship is globalizing at an exhilarating scale, and even though Silicon Valley tends to think of itself as the center of the startup universe, who knows what the future has in store?
Finally, the domain of Artificial Intelligence is progressing fast, and it would be safe to say that it will disrupt many fields from medicine to law to marketing, introducing automation at a scale unknown thus far. A computer has a more powerful memory and much better processing power to take imaging, lab, and other test data, run them against powerful algorithms, and do a much better job diagnosing patients, prescribing treatments. Media buying decisions online are already seeing real time buying as the primary trend, something impossible to do by hand. Unicorns will be born from such extensive automation for sure, although the societal impact of such massive scale automation is likely to be painful.
By no means do I claim to have any grand view into the uniquely wonderful minds of entrepreneurs who are or will be building the next set of Unicorn companies. All I have tried to do is to simulate for a large, global audience of entrepreneurs, the experience of having a cup of coffee with people whom you would likely not meet in that capacity.
There is much to learn from each of them.
The 1Mby1M courses are all heavily based on interview-based case studies on Innovation, Business Models, Go To Market Strategies, Validation Principles, and various other nuances of an entrepreneur’s journey. We offer extensive opportunities for entrepreneurs to learn the lessons from the trenches from successful entrepreneurs who have done it before.
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Introduction -
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How To Build Unicorn Tech Startups
This course gives several founders of billion dollar Unicorn startups a forum to share their hard-won advice in their own words.
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From Hardcore Techie to Unicorn Entrepreneur: Dheeraj Pandey, Founder of Nutanix
Inspiring story of a passionate technical founder who has built one of the iconic fast growth Unicorns in the tech industry.
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Early Customer Validation
We begin with Tableau Software and Founder CEO Christian Chabot from Milwaukee, Wisconsin. The company was acquired by Salesforce in 2019 for $15 billion. Please read the transcript of my interview with Christian.
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Maximize Valuation
The next lecture is my interview with Greg Gianforte, Founder of RightNow.
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Montana Mogul RightNow Founder Greg Gianforte
Greg Gianforte, Founder and CEO of RightNow Technologies, took the company public, and later sold it to Oracle for $1.5 billion. He made an unorthodox choice of building the company mainly in Montana. Today, RightNow (now Oracle) is one of Montana’s largest employers.
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Domain Knowledge
My interview with Fred Luddy, Founder of ServiceNow, follows.
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Fred Luddy, Founder of ServiceNow, Builds a Unicorn Servicing IT
Fred Luddy is Founder of ServiceNow, one of the most successful companies in the history of enterprise software. Founded in 2003, ServiceNow is valued at over $12 billion in the public market. This is a truly wonderful discussion, marked with Fred’s warmth, humility and wit: “We hire people with a lot of experience. We ask them to bring their knowledge, and leave their baggage!”
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Building a Unicorn with Dharmesh Shah, HubSpot
Dharmesh Shah, Founder and CTO of HubSpot, discusses his entrepreneurial journey with candor, humility, and generosity. Wonderful conversation.
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Putting the Freshworks IPO in Context
Here I put the Freshworks IPO in context.
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Therese Tucker, Founder of Blackline, on Building a Billion Dollar Unicorn
Therese Tucker, Founder and CEO of BlackLine, is a very successful female entrepreneur who followed our core philosophy of bootstrap first, raise money later. When I first met her in 2009, her company was in the $10 million revenue range. Subsequently, it has continued to grow at 50% CAGR year over year, and Therese raised private equity funding in 2013 to take liquidity for herself and her team. With annual recurring revenue in the $65 million range, and continued growth at 50%, $100 million revenue is not far in the horizon. And with that, the company’s valuation will easily touch unicorn levels.
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Ross Mason, Founder of MuleSoft, Bootstrapped First, Raised Financing Later
Ross Mason, Founder of MuleSoft, has built a terrific commercial open source company that is scaling at Unicorn rates, with freemium conversion rates in the 5-6% range. Ross discusses how he got the company off the ground, and built a product strategy that makes such high conversion rates possible.
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Girish Navani Built eClinicalWorks To Enjoy
Girish Navani, CEO of eClinicalWorks, has bootstrapped a billion dollar Unicorn with a paycheck. Girish didn’t quit his job for two years, while he tested and validated his original product and customer base. He now has built a $300 million revenue company that is still 100% bootstrapped, private, and has no desire to sell out or go for an IPO.
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Bootstrapping Second Venture To Unicorn Status with Ratmir Timashev, Veeam
Ratmir Timashev is CEO of Veeam. This is Ratmir’s second venture, so he had some money to bootstrap with. Consequently, Veeam avoided taking any venture capital and grew organically till about $200 million in revenue. Today, Ratmir has taken some money, but only to give himself and his co-founder some liquidity, and access a network to find adjacent product lines. Ratmir also discusses how he has structured the investment such that the company doesn’t need to exit. Very interesting!
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India’s Flagship Global Product Story: Druva CEO Jaspreet Singh
Jaspreet Singh is Founder and CEO of Druva, India’s flagship global product success story.
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Though Leader in Mobile & Social: Clickatell CEO Pieter de Villiers
This is a terrific story of a South African team of entrepreneurs who have provided tremendous thought leadership in mobile chat commerce and have built a great company. Along the way, they raised money from Sequoia Capital, and have achieved (unverified) Unicorn status. The beauty is that this is not a glorified Unicorn built out of financial engineering,but one that is firmly rooted in strong revenue growth.
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Building an European EdTech Unicorn from Austria: GoStudent CEO Felix Ohswald
This is a terrific story of a European EdTech venture that has raised $600 million dollars and is scaling extremely well after 3 years of not finding a monetization model.
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A Late Bloomer on Building a Legitimate Unicorn: Veeva Systems CEO Peter Gassner
Peter Gassner is a self-described late bloomer. In a wonderfully authentic interview, Peter describes here how he turned his middle-age crisis into a multi-billion dollar market cap company. Veeva, when we had this conversation in 2016, was doing well over $500 million in revenue and trading at a market cap of over $4 billion. Veeva was built on Salesforce and went public in 2013. There’s nothing foo foo about this company. It’s raw execution. I love the story.
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From Zero to $3.7 Billion: Jyoti Bansal on Building AppDynamics
AppDynamics Founder Jyoti Bansal started as a first-time entrepreneur trying to do a fat startup. Read how he managed to navigate the chicken and egg, and build a Unicorn-level success. Superb story!
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Thought Leader in Cloud Computing: David Schmaier, Founder of Vlocity
David was on the founding team of Siebel, back at the very beginning of the CRM industry. With Vlocity, he focused on the next wave of industry-specific cloud solutions. Excellent discussion on the future of enterprise software for when we spoke in 2015. Vlocity was acquired by Salesforce in June 2020 and is now officially Salesforce Industries. David Schmaier is now President & Chief Product Officer at Salesforce.
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Establishing the Customer Success Category with Gainsight CEO Nick Mehta
Nick Mehta, CEO of Gainsight, first spoke with me when Gainsight was very young. Much has happened since. This conversation catches us up on the interim years since 2013. Gainsight recently raised money from Vista Equity at a $1.1 Billion valuation.
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Investor Perspective from Ravi Mohan, Shasta Ventures
Ravi Mohan is Managing Director at Shasta Ventures, a firm that has invested in three SaaS Unicorns. Ravi discussed these investments: Apptio, Anaplan, and Zuora.
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Are There Unicorn Startups That Were Bootstrapped?
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Is It Possible To Build A Unicorn Startup Out Of Australia?
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Can One Build A Unicorn Without VC Funding?
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Can You Bootstrap A Unicorn Startup With Your Paycheck?
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How Likely Is It That You’re Building A Unicorn?
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Can You Build a Unicorn from Australia, outside Silicon Valley?
