Unicorn status.
The revered milestone for a SaaS startup.
The words one billion dollars are thrown around a lot in tech—perhaps more than anywhere else.
A billion-dollar valuation is a goal many founders set, and often used as a proxy for the economics of venture capital returns.
It’s also an impressive bloody number.
To put it visually, one million seconds is about 11 days. A short holiday to Samoa, if you will.
One billion seconds? That’s a whopping 31 years. Decades of your life—children, careers, studying, all of it.
The difference is enormous.
While one billion dollars is certainly impressive, I’m here to tell you it’s not the only impressive number. Maybe we should widen our gaze and challenge Unicorn status as the ultimate (or only) goal for SaaS startups in New Zealand.
I’m a huge advocate for the tech ecosystem—both through my work at Atlas Digital, where we help tech companies acquire customers, and as a startup investor across both NZ and Australia.
We should absolutely aim high, but we need to focus on creating great, value-adding companies rather than obsessing over arbitrary milestones.
In the SaaS world, the term “unicorn” tends to dominate discussions about startup success. For those who aren’t familiar, a unicorn is a privately held startup valued at $1 billion or more. It’s often seen as the gold standard for entrepreneurs.
But there’s a lesser-known term, “centaur,” which describes a valuation between $100 million and $999 million. It’s a very impressive achievement that often gets overlooked as an enormous achievement in the mad dash toward unicorn status.
Sure, it’s natural to aim high, and we all should. But unicorn status isn’t the only measure of success. Occasionally, I’ll hear of a company exiting for millions, and I’ll overhear others (jealous, perhaps?) saying they should’ve kept going.
But let’s be real—it’s incredibly tough to reach a billion-dollar valuation. That’s 31 years worth of seconds, remember? And it’s not as simple as just ‘keep going’.
Think about scaling a company from $1 million to $10 million. That’s no small feat.
Now imagine moving from $10 million to $100 million. That’s a heck of a lot more value created, but it also means bigger teams, more locations, and a whole lot more work.
Now, consider just how much more work it is to get from $100 million to $1 billion. It’s a ton more effort—not to mention the additional risks, sweat, and tears involved. The total addressable market size also needs to be sufficient to achieve this.
The allure of becoming a unicorn comes with huge pressure. Founders and investors often zero in on rapid growth and high valuations, sometimes at the expense of building a sustainable business or workload for their teams. This focus can lead to unfeasible practices, inflated valuations, and a narrow gaze fixed on that elusive billion-dollar mark.
The reality? The journey to unicorn status can be fraught with challenges. Many startups prioritise growth metrics over profitability, resulting in companies that might struggle to maintain their market positions or survive economic downturns. When the only goal is to reach that billion-dollar valuation, the risk of compromising a company’s long-term viability skyrockets.
On the flip side, centaurs offer a different narrative. Companies like Tradify and Timely have achieved substantial exits without hitting the unicorn threshold. These centaur companies highlight some key benefits:
While unicorns are impressive feats, centaurs provide a more relatable and attainable goal for founders. Success should be measured not just in dollar amounts but also in the value created for customers, employees, and communities. Building a sustainable, impactful, and fulfilling business should be at the forefront of every founder’s goals.
I firmly believe you can achieve a lot of success and growth without always swinging for the fences. Smacking the ball to first base consistently is a reliable way to capture returns without massive exposure to risk. It might be a slower journey, but it’s also a surer one.
In New Zealand’s tech ecosystem, I see more value in creating 10 $100 million companies than in just one $1 billion company. Why?
Well for starters, there are fewer people in $100 million companies, which arguably leads to broader contributions across the business, resulting in more experienced teams—rather than a bunch of specialists in corporate-sized $1 billion companies. As these companies are exited (or employees leave), it adds a wider breadth to the ecosystem, fostering that essential recycling dynamic of talent and capital that we know is critical for growth.
Also, it opens up the possibility of building SaaS companies always targeted towards certain niches that they can own and defend forever. The bigger you become, the larger the audience you need to target is and in turn the more your product needs to adapt horizontally.
Lastly (but not exhaustively), I believe that founders and teams don’t have the added pressure of trying to hyper scale their businesses, leading to them 1) potentially being more sustainable and successful in the long-term, and 2) balancing their mental health and personal wellbeing. Will this balance make it more likely that unsuccessful startup founders will dive back into entrepreneurial life?
Remember, this isn’t a post about not aiming high; it’s about how we grow New Zealand’s promising tech ecosystem sustainably. Both centaurs and unicorns play vital roles in the SaaS landscape. While the excitement surrounding unicorns often overshadows centaurs, it’s crucial to appreciate the milestones achieved along the way.
Ultimately, aspiring entrepreneurs should celebrate their achievements—no matter the valuation—and recognise that reaching a billion-dollar valuation isn’t the sole indicator of success. Success lies in building a business that thrives, makes an impact, and inspires others.
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