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There are five unicorns in Nigeria –Flutterwave, OPay, Andela, Interswitch and Jumia. Building unicorns is not a walk to the park.  Unicorn startups are highly esteemed in the business world, and rightfully so. To become a unicorn startup, a company needs to reach an investor valuation of $1 billion or more, and as of 2022, there are only 554 unicorns worldwide. While it’s not impossible, achieving unicorn status can be exceptionally difficult. According to Embroker, a business only has a 0.00006% chance of becoming a unicorn, and it takes an average of seven years for newborn startups to grow into unicorns. 
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There are a thousand and one startup companies in Nigeria that fail to reach unicorn status despite being in the market for over a decade. One needs to take a whole lot of factors into consideration to know if you can attain unicorn status in record time. In this article, I highlight four ways to know if your startup will attain unicorn status in record time.
  1. Total Market Cap Of Your Industry.
The first factor you must study is the total market cap of your industry. The total cap of your industry simply means the total market size of your industry. Make no mistake, there’s a difference between market size and market share. For example, according to Frost and Sullivan, Nigeria’s FinTech revenue is expected to reach US$543.3 million in 2022 from US$153.1 million in 2017. From these statistics, one can spot the geometric progression of the industry. These statistics will give you an insight that the industry holds so many prospects, therefore, worth venturing into and aspiring to build your unicorn. On the other hand, if the industry is declining or still nascent, you might find it difficult to hit unicorn status in record time. Watch out for quick entry and exit within the niche you want to venture into.
  1. Trends And Movement Of Consumer Behaviour.
Another factor to consider to know if your startup stands the chance of reaching a unicorn status in record time is to understand the trends and movement of consumer behaviour. For instance, digital payment platforms and related financial services will continue to grow as more people are getting interested in contactless and digital payment services. Furthermore, the pandemic has forced millions to venture into online buying, a trend that will continue for a long time to come. Digital lending platforms and insurance are also becoming commonplace in Nigeria, which is a pointer to the fact that both sectors of the FinTech industry hold so much potential. This is traced to the fact that more SMEs and big businesses are becoming smarter in their operations. Further,  these FinTechs are eliminating the tedious process small and medium-sized businesses experience in accessing finance and credit facilities from traditional banks. With the use of Artificial Intelligence and Blockchain technology, these startups are meeting the rising needs of financial inclusion.
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  1. Competitive Edge
Having a technology that is peculiar to your business model and operation can give you an edge over your competitors. A unique and patented technology means that you are the only one in the market that can meet a need with a peculiar technology. Also, clarifying the idea of competitive advantage as a factor that determines attaining a unicorn status, the reason why some companies stay ahead of their competitors is that they either enjoy a monopoly in the market or have a non-replicable technology that gives them exclusive use or they have a pioneering advantage. For example, Apple Inc has been able to boost its market share because of its exclusive technology.
  1. How Widespread Is The Problem You Are Solving.
The more widespread the problem you’re solving, the higher you generate revenues. Just like a popular businessman said: “money flows in the direction of value”. When you create value, people will pay for it. But in the case of knowing if your startup will attain unicorn status in record time, you need to know how many people you are offering your solutions to and how they are willing to buy it. Let me paint a picture here: There is an estimated 18.1 million cancer cases around the world in 2021. If your MedTech startup is about managing and dealing with cancer, there is a large prospective market size you can benefit from while solving the problem of cancer among sufferers.  Featured image source: Odunews.com
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This article was first published on 13th February 2022

nnaemeka-emmanuel

Nnaemeka is an academic scholar with a degree in History and International Studies from the University of Nigeria, Nsukka. He is also a creative writer, content creator, storyteller, and social analyst.

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