Building growth companies with AI
Now that ChatGPT has opened the doors to the AI gold mine, the rush is on. Entrepreneurs who are interested in building a big business with AI may find it useful to know how the Unicorn-Entrepreneurs of the last 6 decades found gold.
Most Unicorn entrepreneurs, from Sam Walton (Walmart) to Brian Chesky (Airbnb), launched with an emerging trend, and dominated the trend. Emerging trends offer opportunities for growth. Mastering them helps you create a real unicorn (with sales over $1 billion) as opposed to VC unicorns with manipulated valuations.
Based on my funding, interviews and research of 122 Unicorn-Entrepreneurs, here are 7 rules to help you master your emerging trend.
#1. Smart Entry Beats Slow Entry: Get in before the industry takes off.
It’s hard to dominate an emerging trend after it takes off because someone else is leading the growing industry and it can be hard to catch up. According to the research of Karl Ulrich (Allen Shockley Lecture at the Carlson School of Management), most emerging trends emerge. between 3 and 11 years after starting. Unicorn-Entrepreneurs mainly jump into the trend after it starts and before it takes off. Now it’s time to build an AI unicorn.
#2. Smart moves beat first movers – it’s all about strategy and skill.
While the business press keeps talking about “first movers,” the reality is that fast movers beat first movers 9 out of 10 times. First movers identify potential. Smart moves capture potential. They imitate and improve on early movers like Sam Walton, Bill Gates, Michael Dell, Steve Jobs and Brian Chesky did. Contrary to Silicon Valley “wisdom”, this is not about early products or minimum viable products. It’s all about smart moves with strategies and skills. Sam Walton moved smart to small towns, Bill Gates to operating system, Michael Dell to direct to consumer, Steve Jobs to a music platform and Brian Chesky making it easy for owners to find guests.
#3. Smart capital trumps venture capital: growing with control.
To stay in control of your business and the wealth it creates, delay or avoid venture capital (VC) by using smart capital to get you off the ground. 6% got VCs before demonstrating their leadership potential and lost control of both their company and the wealth they created. 18% of Unicorn-Entrepreneurs got VC after Leadership Aha and kept control of their companies. Examples are Bill Gates and Mark Zuckerberg. 76% avoided VC and kept more of the wealth created. Examples are Michael Dell and Michael Bloomberg.
#4. Smart startups beat money-losing startups: Revenue is the smartest capital.
The capital-intensive VC model that expects revenue has mostly worked in Silicon Valley. If that’s where you are, this might be a good option if you don’t mind being at the mercy of angels and VCs. But you know only about 100/100,000 get VC and about 80% of those who get VC end up failing. Also, you are likely to lose control of your company. If you’re not in Silicon Valley, your odds are better if you fund with cash flow and smart capital instead of relying on second-tier VCs, because the top 20 VCs are mostly in Silicon Valley. Billion dollar businessmen from Sam Walton and Bill Gates to Joe Martin and Gaston Taratuta grew on income.
#5. Smart Speed Beats Wrong Speeds: Launch to balance cash flow and leadership.
How fast you grow often influences how much capital you need. Grow at “smart” speed, which is based on your cash flow speed, market speed, and industry speed. Bob Kierlin dominated the fastener industry growing at a 30% annual rate with internal cash flow.
#6. Smart alliances beat wealthy competitors: disrupt sluggish corporations and dominate.
The Internet allowed retailers like Amazon.com to disrupt larger stores like Borders because online sales didn’t require stores, making Borders’ business model obsolete. But when corporations can add AI to existing business models, they can be a strong competitor or potential acquirer. So keep corporations in mind when starting your business, for alliances or acquisitions. Google bought YouTube because YouTube was better than Google’s service.
#7. Smart skills beat startup skills: Unicorn-Builders beat Unicorn-Starters.
Learn technical skills to develop an AI product, sales skills to find customers, financial skills to launch, and smart financial skills to lead. Unicorn entrepreneurs used smart financial skills to grow more with less. Get these skills. Or else, your idea could be appropriated by someone else like Mark Zuckerberg, who was approached by fellow Harvard students to write the code for what ended up as Facebook. Zuckerberg seems to have appropriated the idea. Or you could be replaced by a professional CEO, which is what happens to many founding entrepreneurs.
MY VIEW: Emerging trends create unicorn opportunities for fast movers. AI is taking off and will create many new industries and growing companies. This is the time. But entrepreneurs need skills to move smartly. Areas can build unicorns by training everyone.
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As technology and the industry of entrepreneurship continues to expand, it can often be hard to know who to look to for guidance. Fortunately, there has been no shortage of successful ‘unicorn’ entrepreneurs throughout the past 6 decades. From Elon Musk, Bill Gates and Steve Jobs, to the founders of Uber and Airbnb, the individuals listed have all achieved success in their own ways. Here at Ikaroa, we have closely followed their journey and have broken down 7 timeless rules for success from these 6 decades of unicorn entrepreneurship.
1. Develop a passion for the business: Developing and nurturing a burning passion for the work being accomplished will help to cultivate and encourage others to get on board, inspiring success.
2. Listen to your customers and take action: Successful entrepreneurs are always listening to their customers and taking prompt action in order to improve their products and services.
3. Utilize and integrate the latest technologies: Seizing the opportunities which comes with new technologies and innovations is key and can even provide a much needed competitive edge.
4. Take risks while being aware of the potential costs: Although risks should not be taken blindly, the rewards and potential growth opportunities invariably outweigh the potential costs associated with taking a risk.
5. Have a strong team and supportive network: Surrounding yourself with a strong network and team of individuals who are equally invested in the success of the venture will help to accelerate the rate of success.
6. Constantly look for ways to improve: Continuous improvement is a key to successful entrepreneurship. Aiming to be better and looking for ways to improve each day is the key to getting ahead.
7. Remain focused on the end goal: Staying focused and having an eagle-eye view of the end goal will ensure that even during the most challenging of times, the desired objectives remain in view.
Incorporating these strategies into entrepreneurial activities will ensure that success is achievable. Here at Ikaroa, we understand that as technology and the ecosystem of businesses rapidly evolve, so too do the strategies for achieving success. We are therefore dedicated to continuously researching modern day strategies and seeking to deliver these golden rules to the world of corporate success.
