There are many ways to define success for a startup, but perhaps the highest marker for success is unicorn status. For this report we chose to look into unicorns and the trends among the first ten people hired into them.
This involved thousands of hours of original research.
Unicorns: When, Where, and What?
The unicorns reviewed were some of the biggest, most famous companies of the past decade including Deliveroo, Revolut, Alto Pharmacy and Fair. These charts detail the spread of companies we reviewed; when and where they were founded, and what industries the companies were in.
There are many more unicorns in the US, so the 50 most recent unicorns researched were all founded in 2015 or later. In Europe, the startup space is rapidly growing with top VCs now opening European offices, but historically it has not been as active or as focused on fast growth. As such, the 50 most recently founded European unicorns were founded from 2009 onwards.
Across the US companies it took an average of 3 years to become a unicorn, and in Europe it took an average of 5.5 years.
US unicorns are predominantly in California, with a secondary hub in New York. There are growing hubs in Boston, Georgia and Texas. In Europe the major hubs for startups are in the UK and Germany.
The sample of unicorns selected was determined according to founding date, rather than industry. Nonetheless, there was a pretty even balance between B2C and B2B companies (47:53). The most common industries were B2C Fintech, B2B SaaS, Healthtech and E-Commerce, followed by hubs of Automotive and Security startups.
The Rapid Growth Mindset
A startup candidate must be determined, have grit and be able to execute.
The Rapid Growth Work Ethic
Joining an early-stage startup team is really hard work, and work-life balance often suffers. Luckily, those who join expect this.
The Start-Up 'Bug'
Once people get a taste of the startup life, they tend to get the ‘bug’, and previous experience within startups can be key to success.
Experience: The US Advantage
In Europe 74.42% were in the first 10 years of their careers. In the US, it was 60%. US startups hired those with more experience.
We also looked at companies individually to see how the first-ten team as a whole was composed in terms of experience.
Lateral Hiring: Quality over Quantity
While the level of experience tends to be lower, the relevance of experience is key. Across all 100 unicorns, 67% were lateral hires.
Academic Rigour Quantified: Do you need a top degree?
Winning the War on Talent
The best candidates are in high-demand and usually have their choice of startups. When choosing which to join, the Founder is the most important factor.
The ideal candidate has determination, grit and the ability to execute.
Essentially you are investing in that start up, but with your time not your money, so really you should be asking all the same questions an investor would. In fact it’s more important because you only get to invest in one and the personal stakes are much higher.
Conclusion: The Ideal Candidate
Unicorn startups are unique and often intense companies to join, and the earliest stage first-ten team is an extremely important part of growth. Startups are concentrated in the US, but their market is growing rapidly in Europe. There are several differences between the two startup ecosystems in terms of fundraising patterns and culture, but in the type of candidate that unicorns hired, the trends are surprisingly similar.
Who is the ideal startup candidate?
What should companies look for in their first ten hires?
1. A Startup Personality and Mentality
Determination and grit as well as the desire and ability to actually execute on tasks are essential for the type of person who can withstand the tough moments and sometimes scrappy nature of a startup, and the type of person who will accept the risk of a startup to begin with.
2. Someone Who Understands the Work It Takes
At the earliest stage of a startup, there is a big journey to growth ahead. Candidates must recognise this mission ahead and be willing to work really hard for success. A track record of or interest in startups is a marker of commitment and understanding. Transparency on expectations from the company’s side is key.
3. Experience in the Job Function
A candidate doesn’t need to have several years of experience but they should have done at least aspects of the job before. Lateral hiring is a strong trend where the candidate has already proven their ability to fulfil a job function.
4. Academic Rigour
While not essential, a relevant degree from a top university offers transferable skills or even a functional grounding and can be a clear indicator of intelligence, ambition and work ethic.
5. Buy-in to the Founder and Company Mission
BUY-IN TO THE FOUNDER AND COMPANY MISSION: A candidate can be perfect on paper, but a company needs commitment; someone who understands and supports the mission. Belief in the company mission means equity has value and a candidate will be willing to work extremely hard for success.