5 Telltale Signs A Tech Startup Is On Track To Becoming A Billion-Dollar Enterprise

If you were to ask tech leaders to describe what distinguishes an exceptionally successful enterprise from the average company, they’d probably use words like focused, driven, forward-thinking, and ambitious. These descriptions are no doubt accurate, but to me, they could describe almost any tech startup. And if they describe almost any tech startup, then they don’t truly describe the tech startups that go on to become billion-dollar enterprises.


By Ryan Westwood, Forbes, November 2, 2018


I became fascinated by this issue during a recent conversation with my colleague, Jason Holmes, president and COO of the cloud-based sales enablement platform Showpad. Jason was formerly the COO of Marketo, which Vista Partners recently sold to Adobe for $4.75 billion, realizing a profit of roughly $3 billion in less than three years. In looking at the data, we realized that just 57 startups out of more than 19,000 achieved valuations of $1 billion or more in 2017; in other words, a new startup has only a 0.00006% chance of becoming a billion-dollar enterprise. That said, Jason and I agreed that these so-called “unicorns” of the business world are not achieving outsized success by pure chance. Truly successful companies share common characteristics.


This article focuses on the key aspects of tech startups that Jason believes truly position them for outsized success--a perspective that he gained from his experience at Marketo. Let’s explore the five telltale signs that a tech startup is on track to becoming a billion-dollar enterprise:


Flawlessly executing on a focused vision and strategy: Every tech startup has a vision and a business strategy, but not every company will be fully successful executing on its vision and strategy. The ability to execute starts at the top. The founders and CEO must be more than just relentlessly focused, passionate, and determined. They must build a dream team of exceptionally dedicated employees; indeed, even one hiring mistake could derail a startup’s success trajectory. The founders and CEO also must build a board of directors with just the right mix of personalities, skills, and expertise. As Jason Holmes reminded me, it’s OK for your board to be composed of your investors and founders in the early stages, but it’s the CEO’s job to recruit more independent board members over time—people who can provide invaluable oversight in key areas like auditing and compliance.


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