Once, a private company with a $1B+ valuation was such a rarity it earned the name of a mythical being. However, in recent years, unicorns have become far more abundant. Rather than fairytale creatures, these hypergrowth companies are now a regular feature in popular business discourse and are rapidly growing in number from year to year.
We interview product monetization expert Madhavan Ramanujam, partner and board member at Simon-Kucher & Partners, on what it is like getting up close and personal with some of the most important brands in business today.
How many unicorns has your firm worked with? Can you name some?
Madhavan Ramanujam: Simon-Kucher & Partners has helped 32 unicorns so far. It is a number that keeps on growing. Our clients range from some of the biggest unicorns, like Uber, to some of the latest additions to the list, such as Asana and Segment.
Is this experience with unicorns unique to Simon-Kucher?
Madhavan Ramanujam: Yes, I think it is. A big surprise is how many unicorns had never employed consultants of any kind until Simon-Kucher. Many unicorns are hugely self-reliant, and their growth has come so quickly that they have not yet felt the need for outside help. We are often the first outside organization they’ve trusted to help them with their business, which is a huge honor.
But if they don’t trust consultants, why do they turn to you?
Madhavan Ramanujam: The topic of monetization is what we live and breathe at Simon-Kucher. Most people hope they will monetize, rather than knowing they will monetize. They lack a systematic approach. Even if you’re doing quite well, it is nearly impossible to find the optimal product-market-price fit if this is your first time doing it. Most people find that they cannot just test their way into it. That’s where our depth of experience really helps.
Board members often introduce us to the CEOs, and ask for our support with the number one challenge facing unicorns right now – how to monetize and grow on the revenue side. Often nobody really has a full clue about how to go about this, even though everyone has an opinion. And that is where we perfectly fit in.
So you’re like a “unicorn whisperer”?
Madhavan Ramanujam: [Laughs] Correct.
What’s it like working with these companies? Is your advice different than with other clients?
Madhavan Ramanujam: Whether we’re working with a startup or a major corporation, we always drive home the principles surrounding monetization, customer centricity, and value-based thinking. However, there is a difference in how we deliver this advice when working with unicorns. Work is done in sprints rather than longer projects, and we have to be more agile in how we approach problems. There is also a lot less bureaucracy and politics with unicorns. Unicorn employees are empowered to make decisions fast, there is no fear of testing and learning, and buy-in periods are much shorter than with our other consulting projects.
Can you tell us a little more about your work with Uber?
Madhavan Ramanujam: We were instrumental in helping Uber launch their loyalty program for their riders, Uber Rewards. We worked hand in hand with Uber on research to understand what kind of benefits resonate with their customers. This included how many tiers the rewards system should have, how the points system should be designed, and how rewards should be allocated. We also supported with the launch. The program is now available in all U.S states.
Would these companies be as successful as they are without your advice?
Madhavan Ramanujam: It’s really a team effort. We work with unicorns to take them to the next level. But recently we have even worked with some non-unicorn startups that were able to go on and raise capital thanks to the increased focus on monetization and revenue generated through our projects. So you could even go as far to say we are now helping to make unicorns as well.
How do you do that? What advice do you have for companies that are hoping to join the unicorn club?
Madhavan Ramanujam: Successful companies provide products that customers truly need and value. However established you are, whatever your industry, the rules regarding customer centricity and monetizing innovation still apply. Customers should be holding the reins behind every product development process – this is not just relevant to unicorns, but a takeaway for all companies of every shape and size.
You’re based in San Francisco. Is this just a Silicon Valley phenomenon?
Madhavan Ramanujam: The magic with unicorns did start in the Silicon Valley but it is quickly spreading. Fifty percent of unicorns are concentrated in the US. But look at China. They have close to 100 unicorns, that’s 30% of the world’s unicorns. These staggering numbers just show how unicorns are becoming a global phenomenon. It’s not just limited to tech companies in the Silicon Valley.