Decacorn companies and hectocorn companies, which are even larger than unicorn companies, are also explained
Unicorn companies are unlisted technologies with a valuation of $1 billion or more and less than 10 years old. about companies. There are many unicorn companies in the United States and China, and decacorn companies and hectocorn companies also emit from these countries.
In this article, I will explain the four conditions to become a unicorn company and the reasons why there are few unicorn companies in Japan. Let's take a look at companies that are actually unicorns now or were unicorns in the past.
*In the "Founding Techo" where I am writing this article, more detailed information is also explained in the thick "Founding Techo / Printed Edition". You can get it for free, so please order it.
Contents of this article
What is a unicorn company?
I will explain what kind of company a unicorn company is and the four conditions for being called a unicorn company.
Unicorn company requirements
A unicorn company is a venture company with the potential to grow in the future. Unicorn company "Unicorn" is a legendary white horse with one horn in the center of the forehead, and it was named "Unicorn company" because of its rarity.
In order to be called a unicorn company, the following four conditions must be met.
Let's take a closer look at the four conditions above.
In the first condition, "Appraisal value is $1 billion or more", "Valuation value" refers to how much the "value of the company" is. Venture capitals and various research institutions calculate the value of a company based on the assets owned by the company and its future potential. The first condition is that the valuation is at least $1 billion (104 billion yen in Japanese yen).
The second condition "unlisted" is literally not listed on any market. In addition, the third "within 10 years of establishment" is a condition that the company must be established within 10 years. A company will no longer be a unicorn if it goes public or has been in business for more than 10 years.
The last condition "Technology Company" is not a requirement. Any unlisted company with a valuation of $1 billion or more that has been in business for less than 10 years is considered a unicorn, even if it is not a technology company.
However, most of the so-called unicorns today and in the past belonged to technology companies. Compared to other businesses, technology has the potential to make a big leap forward in the future, so companies that can grow to the point of being called unicorn companies are inevitably concentrated in companies that deal with technology. .
What are decacorn companies and hectocorn companies?
Next, we will look at decacorn companies and hectocorn companies. Decacorn companies and hectocorn companies are both included in unicorn companies, and they call companies with particularly high valuations among unicorn companies.
Decacorn companies: companies valued over $10 billion Hectocorn companies: companies valued over $100 billion
Converting to 1 dollar = 100 yen, decacorn companies must have a valuation of 1 trillion yen, and hectocorn companies must have a valuation of 10 trillion yen. Companies with a corporate value of about 1 trillion yen include TOTO and Kansai Electric Power, and companies with a corporate value of about 10 trillion yen include Recruit Holdings and Nippon Telegraph and Telephone. These companies are not unicorn companies, but they are all well-known big companies in Japan.
You can imagine how difficult it is to become a decacorn company or a unicorn company, considering that it is necessary to acquire the same value as these famous companies in a venture that has been in business for less than 10 years.
What kind of companies are unicorn companies?
From here, we will introduce what kind of companies are unicorn companies. Some of these companies should be familiar to you.
An example of a unicorn company
Currently, there are companies like this among unicorn companies.
Bytedance: Operates TikTok Stripe: Online payment business SpaceX: Space business Canva: Provides graphic design tools Ripple: International remittance and payment network service Discord: chat app
You can see that there are many companies that are developing services using the Internet. I think there are many people who say, "Only services that I have used before."
Famous companies that used to be unicorns
Famous companies that used to be called unicorns in the past include Facebook and Twitter. Both have now grown into world-renowned companies. There are other such companies as well.
Dropbox: Online storage service Square: Mobile payment business Skype: Video chat call service Zoom: Video conferencing service
There used to be a company in Japan that was called Japan's largest unicorn company. It's Mercari. However, since it went public in 2018, it has fallen out of the definition of a unicorn company. Mercari is still known as a flea market app that boasts an overwhelming share in Japan.
Examples of Unicorn Companies in Japan
Currently, there are six unicorn companies in Japan.
SmartNews: News app service SmartHR: Cloud personnel and labor software Preferred Networks: Deep learning Playco: Game development Paidy: Postpaid payment service Liquid Liquid): Virtual currency trading business
Unicorn companies that were born through crowdfunding
Some companies raised funds through crowdfunding and later grew into unicorn companies.
Airbnb: Private lodging brokerage business Uber: Vehicle dispatch app service
Both companies are now publicly traded and are no longer unicorns. In Japan, a unicorn company originating from crowdfunding has not yet been born.
Global distribution of unicorn companies
Many unicorn companies are created in the United States and China. This survey resultAccording to the data of a research company in the United States, more than 700 unicorn companies are listed from all over the world, but among them, there are only 6 Japanese companies introduced in "Examples of Japanese Unicorn Companies". Not applicable.
On the other hand, you can see that there are more than 200 American companies and more than 100 Chinese companies compared to Japan. There are many others in the UK, India and Germany.
Why are there so few unicorn companies in Japan? Why?
There are almost no unicorn companies in Japan. Let's look at the reasons from two perspectives.
The first point is that there are few young entrepreneurs in Japan who are the core of unicorn companies. Hiring new graduates is common in Japan. Before graduating from university, students start job hunting, decide which company to join, and become a member of society. Only a limited number of people want to start their own company, and starting a business is not a common employment method for young people.
But that is not the case in America, which boasts an overwhelming number of unicorns. The hurdles to starting a business are lower than in Japan, and many entrepreneurs are being produced.
Unlike Japan, many entrepreneurs can be produced because the hurdles for raising funds are lower than in Japan and there are many precedents, and entrepreneurship is spreading as a general employment method even for young people. It is thought that the environment is in place leading to the difference in the number of unicorn startups.
The second point is that Japan does not have an environment for making large investments in young entrepreneurs. Compared to the United States, Japan does not have a very high investment penetration rate. In the United States, investing is common and it is also common for individuals to invest. There are many investors and venture capitalists who invest in venture companies, and the hurdles to raising funds are not as high as in Japan.
On the other hand, in Japan, there are few investors and venture capitals that invest in young investors, and it is not easy to raise funds for a new venture company. In order to improve this situation, the Japanese government is implementing certain measures.
Efforts by the Japanese Government
The Ministry of Economy, Trade and Industry has launched a program to support start-up companies called "J-Startup."
Companies selected as J-Startups receive various types of support from members of the "J-Startup Supporters", which consist of governments, venture capitalists, and large corporations. This includes the provision of business space, advice from experts, and preferential treatment in support measures such as various subsidies.
Through the J-Startup program, we aim to create 20 unicorn companies in Japan by 2023.
If you want to become a unicorn company
If you want to become a unicorn company, here are four points to keep in mind. Clearing these four points is a shortcut to making a leap to a unicorn company.
Creative Businesses
There are already many companies in the world, and they offer a wide variety of products and services. In order to overtake those companies and become a unicorn company, it is necessary to develop original products and services. Developing a business that is similar to existing products and services will not achieve the feat of over $1 billion in valuation within 10 years.
If it is not a business that makes people feel that it is worth paying money for and that they really want that product (service), it will be worth a billion dollars in a short period of time within 10 years of its founding. It cannot be developed into a profitable company. It is necessary to develop a unique business that captures people's hearts.
Development of human resources
Attracting excellent human resources is a prerequisite for unicorn companies. In order to develop technology, we need people who can come up with unique ideas and highly skilled engineers who can realize them. Creating a product or service that is recognized as having a business value of over $1 billion is no small feat. It is necessary to gather a large number of excellent human resources who are highly specialized and can strive toward the same goals and dreams.
We also need excellent support staff to support these talents. No matter how excellent your products and services are, if you can't get people to recognize them, you can't spread new technology to the world.
Securing Funding Routes
Fundraising is the lifeline of any company's continuation. Especially for venture companies, it is very important to secure a route for raising funds.
It takes a lot of money to grow into a unicorn company. No matter how much money there is in a venture company, it is not enough, such as working capital and development funds. We also need funds to develop human resources. This is because the more skilled the staff, the higher the labor cost.
In addition, there are cases where "performance" is required to raise funds from financial institutions and banks, but there are cases where it is not possible to meet the requirements for investment in newly started companies. Therefore, in order to raise funds smoothly, you will need to have investors and venture capitalists who understand the business deeply and support you. The lack of such investors and venture capital is the reason why there are few unicorn companies from Japan as mentioned above.
Global Expansion
To become a unicorn company, global business expansion is essential. The Japanese market is small compared to the world market size, and if we focus our business development solely on the Japanese market, the number of users that we can acquire will be overwhelmingly small.
If you don't develop products and services on a scale that can be said to be used by most Japanese people like Mercari, which was once a unicorn company, a business targeting only the Japanese market is a unicorn company. cannot be
There is a hidden possibility that you can acquire more users by expanding your business globally and gathering users on a global scale than by targeting only the Japanese market.
Summary
There are many unicorn companies in the United States and China, but there are only a few in Japan. The reasons for this are thought to be the fact that entrepreneurship is not yet commonplace and the environment in which young entrepreneurs can easily raise funds.
To solve this situation, the Japanese government has started a program called "J-Startup". Through this, we aim to create 20 unicorn companies in Japan by 2023.
Various information on fundraising is posted in the fundraising handbook issued by the founding handbook. There is a lot of information on fundraising, such as how to use public loans, advice from venture capitalists, and how to use crowdfunding. You can order it for free, so if you are interested in fundraising, please use it as a reference. Related articleSubsidy, how I got it Budget 1 trillion yen, subsidy maximum 100 million yen! What is a "Business Restructuring Subsidy"?Articles that everyone is reading in this category 1st News for Entrepreneurs 2 Benefits of Having Your Family as Employees and Points to Note 2nd News for Entrepreneurs Starting a Business in Kitakyushu City! Is it true that it is the easiest city to start a business in Japan? 3rd place News for entrepreneurs What is Organization for Small and Medium Enterprises and Regional Innovation (SME)? 4 Supports I Wish I Knew Before Starting a Business