As fantastic and incredible as mythological creatures, so are the unicorn companies. They have been able to revolutionize business models and are a source of inspiration in the business world for reaching a value of $1 billion.
Although the term has become popular in recent years, it remains a rare phenomenon. Some estimates calculate that out of every ten thousand startups that raise funding, only one becomes a unicorn.
According to Francisco Pérez, Director of the Latin American Center for Entrepreneurs at INCAE, one of the key successes that these companies have had in achieving this growth is their focus on exponential user acquisition, backed by an offer of free products or services, or at very affordable prices.
1. They develop in a market or markets that allow them to have an exponential growth.
2. The product or service being marketed is of a mass use and rapid production nature, such as in the case of collaborative economies.
3. They apply strategic thinking oriented to rapid and sustained customer acquisition.
4. They are born under the B2C model, that is to say, they develop a commercial strategy to directly reach the client or final consumer.
According to data from CB Insights, there are more than 270 unicorn companies worldwide, most of which are concentrated in the United States and China. One of the best known is Uber, born in San Francisco with operations in more than seventy countries, which has become the leading provider of transportation services through an app.
On the other hand, the report "Tecnolatinas", carried out by Surfing Tsunamis and the startup accelerator Nxtp.Labs, points out that in Latin America there are unicorn companies such as B2W, OLX or Kio Networks, but most of them are of Brazilian, Argentinean or Mexican origin.
In Central America we have the example of Duolingo, the language learning platform that has been valued at $700 million and is close to becoming a unicorn. It was created by Guatemalan Luis von Ahn (creator of Captcha and reCaptcha) and Severin Hacker; however, it was born in the United States and was financed by North American funds (Drive Capital).
According to Francisco Pérez, the region has potential for innovation and technological know-how, but the main obstacle is the small size of the national markets and the heterogeneity of this area. In addition, there is a major limitation in access to venture capital.
Although conditions are not optimal and Central America is far from becoming the home of many unicorns, there is still room for improvement as nations and entrepreneurs dare to be more disruptive and receive the necessary support.
Contributors: Francisco Pérez and Marilyn Fonseca, of LACE.
