In other words, are you ready to tear down some psychological barriers for success?
The 100 meters sprint races have a psychological and physiological limit of 10 seconds. Back in the 80s, it was such a critical barrier that only a few world-class athletes could surpass the 10 seconds mark.
Once an unachievable hallmark for sprinters, achieved for the first time by Jim Hines back in 1968 and couldn’t be repeated for the following nine years, later became a standard when the limit started being repeatedly surpassed. In the 2016 Rio Olympic Games, six different sprinters were able to complete 100 meters below 10 seconds limit (Olympic.org, 2016).
For the startups, there is also a psychological and also technically challenging limit of getting at least 1 billion dollars valuation. When your company finally reaches this valuation, congrats! You’re now officially called a “unicorn”.
When the term unicorn has been used for the first time for these companies in 2013 by venture capitalist Aileen Lee, there were only 39 unicorns worldwide so that the name was inspired by the rarity of such success (Fan, 2016). However, as of July 2020, there are around 500 unicorns worldwide (Cbinsights, 2020).
As in athletics, the more companies surpass the barrier, the weaker the psychological limit gets, and more often, companies start passing this limit.
The graph above shows that only ten countries have more than five unicorns. Most of the other countries have either one or no unicorn at all. Therefore, the barrier is far from being lifted in these countries.
Even though becoming a tech unicorn gets easier each day, there are still no unicorns in most countries. Sometimes where you are located puts boundaries on you and brings additional challenges.
What feeds your psychological barrier?
Especially in third world countries, being a unicorn seems like an unachievable dream. My emphasis was all on the psychological barriers to this point to present you with the underlying elements fueling it. Here are some of them:
- Access to capital
- Lack of skilled employees
- Immature entrepreneurship culture and ecosystem
Access to Capital
When you walk into a coffee shop in The San Francisco Bay Area, it’s very likely to see an entrepreneur pitching an idea to a venture capitalist or an angel investor. The region is full of entrepreneurs with their ideas and investors looking for an opportunity to invest their excess money.
In developing countries, investors prefer to invest in less risky assets due to unpredictable macroeconomic conditions and volatile local currencies. Therefore, they mostly prefer traditional investment options like stocks, bonds, commodities, or real estate.
If these investors have a higher risk appetite, they may go for investing in companies that is not public yet, but most probably already profitable and growing at a particular pace. It’s a choice blocking the access to early-stage investing for startups, and you get to be an entrepreneur only if you can collect money from family and friends until the phase that you get profitable.
Lack of skilled employees
There is a fair distribution of IQ in all countries. Every country has its geniuses who have the potential to make a difference. However, being a unicorn is never just about how smart you are. Access to education, the possibility of getting working experience in other startups, access to knowledge, etc. are all factors that need to feed this IQ to create skilled employees that will create the next unicorn.
Although many developing countries have quite smart and skilled employees, some countries only provide favorable opportunities to an elite minority. Even if these people are raised at a standard that can compete with the world, their hunger to learn and achieve more leads them to migrate to more developed countries. Eventually, it all leads to a brain drain, and these people create their unicorns in other countries.
Immature entrepreneurship culture and ecosystem
One other factor that sets a wall before your countries’ first unicorn is the culture. If you’ve grown up in a country with an unpredictable economic environment, as I did, you know that your entrepreneurship hopes will be axed by family and friends numerous times.
You’ll always be told that you should work with a stable salary and save money all your life, not if but when the bad times come for the economy. Entrepreneurship has lots of ups and downs, and it’s less likely to provide you with a certain standard of life due to the risks involved. Therefore your motivation gets to be butchered by future anxiety even before it starts.
This disincentivizing culture has an impact on the creation of a healthy entrepreneurship ecosystem as well. Since it’s perceived more of a temporary whim than a perceivable career, it creates fewer entrepreneurs, investors, mentors, incubators, etc. Eventually, it leads to a smaller ecosystem.
Do you have to accept it as it is, or is there a chance to fight back and win?
Enough of the despair and mentioning why particular geographies are not able to produce unicorns, I also want to give a glimpse of hope here.
As Jim Hines showed that running 100 meters below 10 seconds was an actual possibility, many sprinters surpassed this limit afterward, the first determined unicorn in these countries inspire many others. These countries start producing more and more unicorns after that.
About the Peak Games
To make the case more concrete, I want to talk about Turkey’s first tech unicorn Peak Games. Founded in 2010, it’s a mobile technology company that designs and develops mobile card games.
The company, mostly known with its mobile games Toy Blast and Toon Blast, is acquired by global game giant Zynga for $1.8 Billion (Peak, 2020). The official announcement and the amount came directly came from the company itself. You may check their extensive press release here, if you’re interested in.
If you would like to know more about Peak Games and its deal with Zynga and don’t want to read their seven-page extended press release, you may also check out the video below for the highlights of the deal and listen the story from Peak’s Strategy Director.
All the barriers listed above as access to capital, lack of skilled employees, immature entrepreneurship culture, and ecosystem were valid excuses for Peak Games, as well as any tech company in Turkey. However, the perseverance of Peak Games on mobile game development, which is not a substantial industry in Turkey, brought a remarkable exit.
What to make of all these?
Of course, there is no guarantee that the remarkable success of Peak Games will lead to numerous unicorns in Turkey. However, for sure mobile games is now an industry under the spotlights.
Media coverage towards startups is at higher levels than ever. Most importantly, Peak Games has broken a psychological wall standing before the impossibility of being a tech unicorn in Turkey.
Initially, Peak may not have had much access to the capital. Their potential employees may have preferred to seek a career outside where they’re based. Even their industry or entrepreneurship overall may be underappreciated in their geography. Yet, they still did it! More importantly, if they did it, you now know that you also can.
I didn’t tell Peak’s story to give you a framework to copy. It’s the total opposite. They achieved success for not listening to what other people say chased what they believed in regardless of the external conditions.
Wherever your startup is located, as long as you break the barrier and believe in yourself, you’ll find your way to success in your unique way.
If you don’t believe in yourself, then who will believe in you? The next man’s way of getting there might not necessarily work for me, so I have to create my own ways of getting there. — Michael Korda
Till next time!
Special thanks to my friend Harun Reşit Aydin to inspire this piece with his valuable ideas!
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Fan, Jennifer S. “Regulating Unicorns: Disclosure and the New Private Economy.” BCL Rev. 57 (2016): 583.The Complete List of Unicorn Companies
A unicorn company is a startup with a valuation over $1 billion. This is an ongoing list of all unicorn companies in…www.cbinsights.com
This article is originally published on Medium.