Due to its collective nature, the word “startup” often provokes confusion. However, the startup field consists of a hierarchy of clearly outlined stages, each encompassing a financial and expansion phase. This article intends to bring clarity to the topic and reveal the definitions behind the names of these stages, including "Minicorns,” “Soonicorns,” "Unicorns,” “Decacorns,” and “Hectocorns.”
The different “corns” indicate a different financial status that a small company has accomplished. Through the type of 'corn,' one can identify what phase a startup is in, its financial stability, and its level of success.
A hierarchy serves as a goal-setting tool for small businesses, guiding them toward the next steps. In spite of the fact that “unicorn’ is commonly known to the majority, there are still many people who are unfamiliar with the meaning behind it. As the article proceeds, examples will be provided to clarify the fog surrounding the terms.
Before exploring the 'corns' within the startup field, we should clarify what the term 'startup' implies and includes. The startup stage refers to the early stages of a company, often founded by entrepreneurs who seek to develop products and services that they believe will be in demand on the market.
As soon as their product or service is perceived to be in demand, these companies gain momentum. Throughout the stages of their development, startups require different types of support from investors and partners. Starting a business typically requires high initial costs and limited revenue, which often leads startups to seek funding from private investors. Later as startups mature, they rely on expertize and management support, someone to guide them through the unknown corners of their industry.
Startups that are minicorns have a valuation of $1 million or more and are relatively new to the business. The company is in its infancy, but its valuation suggests it has the potential to become a unicorn in the near future. Minicorns are driven by three key aspects - vision, ambition, and capital. Compared to early-stage startups, they are often considered less risky.
The valuation of minicorns ranges between $100 million and $1 billion. It is common for these startups to have very ambitious goals and visions. They aim to transform, modernize, and improve the world.
In most cases, minicorn companies are progress-driven, resulting in rapid and efficient growth and development in their industry. Therefore, a minicorn startup rarely stays at this step of the startup ladder for long.
Zensed is an example of a minicorn startup with enormous potential in its industry. Unlike human-driven fraud prevention systems, Zensed does not require human input. By combining machine learning and artificial intelligence, it analyzes and improves anti-fraud results and monitors new trends and sources. Real-time prediction of the result of transactions allows customers to accept or reject them before any harm is done.
Newgen is another promising minicorn example. The startup provides a platform for digital transformation that integrates process automation, content services, and communication management. With Newgen's low-code application platform, businesses can create and implement complex, content-centric, and customer-focused applications.
As a startup that has the potential to become a unicorn, a soonicorn company is also known as a "soon-to-be-unicorn." Typically, these startups receive funding from angel investors or financial speculators based on future projections or estimated valuations, which often exceed the startup's actual value. Market forecasts and industry valuations are typically used to determine a startup's worth.
These companies are startups that have reached a soonicorn valuation of $500 million and are on the verge of achieving $1 billion.
Larger organizations often acquire startups, which can result in them being valued higher than their actual net worth. This provides a favorable environment for startups to enter the soonicorn stage sooner and move closer to achieving a $1 billion asset valuation. The business model of soonicorns is usually expanding quickly, reaching more customers, and experiencing rapid growth.
From3 is an impressive example of a soonicorn that has the potential to become a unicorn company soon. The software development company specializes in creating Internet-based software for businesses in the financial sector. In addition to cloud-based connectivity and payment processing, From3 also provides clearing and settlement services. Besides offering a fully managed payment technology service, the company offers multi-scheme payment gateways and 24/7 customer service.
Huma is another soonicorn that has tremendously gained popularity during the Covid-19 pandemic. The company, formerly known as Medopad, utilizes technology to assist healthcare providers in improving patient data management, monitoring, and sharing. Its remote patient monitoring (RPM) platform allows for integrating third-party tools and mobile applications.
It's hard to ignore the popularity of the 'unicorn' term, which is widely used and attracting many investors. The term unicorn refers to startups with a unicorn valuation reaching one billion dollars or more by venture capital. Cowboy Ventures founder Aileen Lee coined the term in 2013. Since then, achieving unicorn status has been considered the most coveted among the various levels of the startup hierarchy.
A unicorn startup typically possesses distinctive business models that allow for rapid scalability. Investing in unicorn companies is highly appealing because they are already well established, have industry expertize, and exhibit significant growth potential. However, despite the potential for success, unicorns can also be considered risky investments due to their intense competition.
A well-established unicorn leader is Urban Company - a hyperlocal service provider. Based on proximity and availability, the platform matches experienced professionals with users in need of specific services. By using an algorithm, users can instantly identify professionals who are available at the time and date they request.
Ranked as the number one application for sleep and meditation, Calm is a great example of a unicorn company. This mobile app promotes health and wellness by using breathing exercises, sleep stories, and meditation to reduce stress. The app also includes a dashboard to monitor and track user progress.
Decacorns represent the advanced form of unicorns - the next step on the hierarchical ladder. The key differentiator between the two isn't just the amount of funding they receive, but also their unique business model, growth rate, and revenue model.
A decacorn startup is a private business that has reached a decacorn valuation of $10 billion. Due to their high valuation, decacorn companies are not frequently encountered. Their ubiquitous success has often made these types of companies extremely influential both within their fields of operation and beyond.
Due to their strong influence and expanded reach, government regulations usually target these companies, often narrowing their potential. According to a report issued in January 2022, only 46 companies worldwide have been awarded Decacorn status.
Revolut is a decacorn company that has entered the lives of millions of people worldwide. Founded in the UK and Lithuania, Revolut provides exceptional banking services to its customers. Its offerings include a mobile app and multi-currency cards that enable users to conduct peer-to-peer payments, exchange currencies, and transfer funds between banks.
Founded in 1991, Epic Games is a leading provider of 3D engine technology in the interactive entertainment industry. Video game developer and publisher Epic Games is best known for its game Fortnite, which has over 350 million registered accounts. Additionally, the company has created the Epic Games Store, a digital marketplace for PC and Mac games that focuses on providing a curated selection of games for both players and creators.
Hectocorn valuation reaches beyond $100 billion, and such companies are frequently part of the financial or technology industries. Hectocorn startups are also referred to as "super unicorns."
Examples of these companies include well-known names such as Apple, Google, Microsoft, Facebook, Oracle, and Cisco. However, there are very few businesses that can be qualified as hectocorn companies.
Due to the extremely high valuation of $100 billion, hectocorn is frequently considered an unreachable phase by small and inexperienced businesses. As with decacorns, hectocorn companies are extremely influential in the way society consumes, creates, and adopts technologies and their functions.
Therefore, hectocorn startups are not only threatened by governmental regulations but also constantly under scrutiny from society as a whole.
ByteDance is a promising hectocorn actor at the top of the startup hierarchy. A tech company focused on education and entertainment, ByteDance operates several content platforms. Established in 2012, the company aims to spark creativity and enhance people's lives through its products, such as TikTok, Helo, and Resso.
Hectocorn companies often pursue innovative ideas and visions; SpaceX is the perfect example. The rocket company founded by tech mogul Elon Musk aims to enable human travel to Mars. A major focus of the company is developing and producing highly advanced and developed rockets and spacecraft.
Zebra startups are an alternative outside the companies' hierarchy characterized by slightly different criteria. Zebra companies are expected to achieve two objectives simultaneously: doing good for society and making a profit for investors. The term "zebra" refers to the animal's black and white stripes, symbolizing this dual focus. As a result, these companies are expected to be both financially successful and socially responsible.
Another witty metaphor that characterizes particular companies is 'phoenix.' A Phoenix company is a type of company that emerges from the failure of a previous business. Typically, this new company is created when the directors of an insolvent company purchase the assets of the old business through administration or liquidation. This allows the new company to start fresh with a new approach to business and trade under a new entity. Essentially, a Phoenix company is a business that rises from the ashes of a failed one.
A startup valuation serves essential purposes: to bring clarity to the startup chaos, to help precise positioning, and to encourage growth. For newly founded companies, the established hierarchy provides a road map to success.
The path is well-outlined, including 6 phases: Minicorn, Soonicorn, Unicorn, Decacorn, and Hectocorn. However, unlocking the new level requires acquiring higher expertize in the industry, which is not an easy task. Additionally, each phase presents a different set of obstacles. While Minicorn startups pursue recognition, startup decacorns are focused on resolving regulation issues.
Startup valuation is a hierarchical approach that considers many development stages. However, it is important to note that due to the numerous external influences that directly or indirectly affect every industry, this hierarchy is not constant. As for what may change, we can only wait and see.
