In the world of venture capital, a “unicorn” startup, valued at $1 billion or more, is the ultimate aspiration for many entrepreneurs. Unicorn startups, like Tope Awotona’s Calendly and Kabir Barday’s OneTrust, garner significant attention from investors and venture capital firms due to their extraordinary unicorn valuation. These remarkable success stories serve as inspiration for aspiring entrepreneurs seeking startup success. The aggregate valuation of unicorns around the world is a whopping $2 trillion as of 2020.
As noteworthy as their valuations are, the real question on everyone’s minds is: What does it actually take to build a unicorn startup?
Naturally, we asked the experts themselves—and their answers did not disappoint.
During the Building a Unicorn panel at Venture Atlanta 2021 Momentum, panel host Vanessa Larco of New Enterprise Associates spoke with the following entrepreneurs and founders:
- Kabir Barday, CEO of OneTrust
- Tope Awotona, CEO & Founder of Calendly
- Tim Sheehan, CEO & Co-Founder of Greenlight
- Eric Boduch, Co-Founder of Pendo
This panel discussion offered invaluable insights and advice for entrepreneurs aiming to join the ranks of unicorn startups. The wisdom shared by these successful founders can be a guiding light for those looking to replicate their startup success. Read on for some panel highlights, or watch the entire panel discussion video below.
Building a Unicorn Panel Discussion
Vanessa Larco: Thank you everyone for being here. It’s great to be here in person with all of you. So I think we’ll just dive right into questions. Why did you choose to build your startup in the Southeast?
Kabir Barday: I was born and raised in Atlanta, ended up at Georgia Tech, and it just kind of happened. But as we grew, this ended up being one of the biggest competitive advantages we had. We had competitors in Silicon Valley, New York, DC, and Europe, and we found that our ability to access the international markets in Atlanta was significant. And yes, it’s the airport, but it’s also the time zone. When you just think about doing business in Europe, part of OneTrust is that we have software that helps with GDPR and all these privacy laws and security laws. A lot of that originates out of Europe, and we were doing 50% of our revenue in Europe within the first year and a five to six-hour time difference is very different than an eight to nine-hour time difference.
The second [advantage] was just access to talent. We largely dodged the talent war for engineering talent because we built the brand in Atlanta. We were the place people wanted to come work and accessing talent from North Carolina, Alabama, and Florida was significant for us.
And then the third, when investors look at our growth profile and then look at the cash burn, they can’t believe it. We are so capital efficient in how we grow and it’s just because everything is more accessible and affordable here.
Tope Awotona: So I think there are a lot of similarities. I ended up choosing Atlanta because I lived here. So the simple fact is what led to starting Calendly here. And at the time I didn’t really think [much of it]. I’d worked for IBM and EMC, which were global companies and had employees all over the world. I also worked for two startups that actually had really good outcomes. And both of those startups were started in very remote, cities. One was started in Shawnee, Kansas. I’m sure you’ve never heard of that. Unless you’re from Kansas. Another company that ended up getting acquired was started in Georgia, and that ended up being a multi-million dollar business.
And so I guess for me, what I thought about was the fact that those companies… they were able to achieve all their goals in spite of being in these very small cities. And I didn’t think of it as a negative. Years later, I reflect on, you know, what Atlanta’s meant. It’s a lot of the same things that Kabir said. The business is incredibly capital efficient and because of the cost of talent, real estate, and employee retention on the east coast versus the west coast. So for us, it’s been a huge advantage.
Tim Sheehan: I think it’s just a boring answer of that’s where I live. I think anyone starts where they are; wherever they happen to live.
Eric Boduch: I actually lived in Pittsburgh when we started Pendo. So our story’s a little more complicated in the sense that, you know, we had four co-founders—two of which happened to be in Raleigh, one in DC, and one in Pittsburgh. We still have a co-founder in DC, and I’ve since moved to Raleigh, but for the first five years of Pendo or so I was a remote founder, which meant more time on planes, but also got used to like working the way we’ve had to work the last couple years.
But we really did think about, you know, would we start this somewhere else? And I’m a proponent of like, okay, you can build a great company anywhere. There are challenges, but there are also advantages, like Tope said, about starting a company in the Southeast; in an area that’s not San Francisco or Boston or New York.
Vanessa: So I think we all touched on capital efficient talent and access to great talent, but in the introductions, everyone [is also] talking about how much Atlanta has evolved. So are these big tech companies moving into the Southeast a good thing, a bad thing, or net neutral?
Tim: It makes it more competitive for talent. I think overall for the metro area, it’s a fantastic positive.
Kabir: I have a slightly different perspective. Certainly, it’s competitive for talent and we’ve seen just in the last year, I mean, we’re having to roll out salary increases and additional benefits. And a lot of the expectation of tech workers in Silicon Valley has come to Atlanta. Tope set the bar very high here for benefits as well. And so we always look up to Calendlly and what we can accomplish as well.
But the downside of being in Atlanta for us is somewhat fixed by those companies coming here at scale. The challenge we’ve had is the caliber of executives we need, from CFOs to CMOs. Once you’re past $5-10 billion, it’s slim pickings anywhere on the east coast. And so the more those companies move their second headquarters here, we’ve seen unbelievable talent at that level start to trickle in.
[The other challenge is] access to mentors and CEO coaching at that level. Tope and I were just comparing notes on just where we go for that peer group. And there’s just not one in our world here. And so I think it’s gonna be great for the ecosystem in terms of helping entrepreneurs like us just think bigger and demystify what it means to get to that scale.
Tope: Yeah. So I have a very similar experience to Kabir. You know, the biggest challenge we have with talent and recruiting is actually not the talent that already exists in Atlanta. Like we do really well there. The biggest challenge we have is as we got from zero to let’s call it, you know, $30 million or certain revenue, all the talent we needed to find was here in Atlanta. But as you scale beyond that, there are these very specialized skills and experience that you need. That’s just incredibly difficult to find in Atlanta; not only difficult to find in Atlanta, very difficult to get those people to even take a look at Atlanta and become interested in moving to Atlanta.
So those people are staying in the Bay Area and when they do move, maybe they’re going to Austin. They’re going to New York. They’re not really considering Atlanta. And so what I think is really positive about all these big companies coming to Atlanta is it raises Atlanta’s credibility. And I think over time, we’ll see more of that talent coming to Atlanta.
Vanessa: I was thinking that, you know, having that meld of bringing experienced folks, I remember you hired some folks from Facebook that wanted to move back home to Atlanta, um, and then have them train up the local folks here and then get that flywheel going so that it, we do level up the talent base here to, to be CFOs that take companies public as well.
Eric: I’ve been involved in startups and public companies in Pittsburgh, San Francisco, and Raleigh, (not Atlanta) and I think there are a lot of similarities between Raleigh and Atlanta. My perspective on the question is it starts out as net negative.
I saw that in Pittsburgh when Google moved in pretty heavily. Now, Microsoft, Apple… they all have offices [there]. So I saw the net negative in particular in engineering costs in the beginning. But then it became net positive, not just from the executive position, which it’s actually a little harder because a lot of people are just opening engineering offices, right. And they aren’t hiring a lot. You know, you won’t see the VP of sales necessarily, or that kind of person you want, or that the senior finance person, it still might be hard to get.
I would argue that the early engineers you want are not the people that are necessarily gonna go work at Apple or Google right now. They’re gonna be the people that really want to be in a startup that really want to dig in; that are passionate about the problem you’re solving. I think that early base is still very recruitable, you know, even from the Googles of the world.
Tope: I would also add that I think the upward pressure on, you know, salaries is a nationwide phenomenon. It’s not unique to Atlanta. And I think every company has to be prepared to deal with that, regardless of where you might be.
Vanessa: That’s a good point. Kabir, you touched on mentorship. One of the things that sold me on Silicon Valley when I moved there from Atlanta was access to all these mentors and people that have done this before. Have you found good mentors out here? And if so, where did you find them?
Kabir: I found amazing mentors in Atlanta, but as we’ve scaled, how we approach mentorship has been very different.
What I learned very quickly is that your mentors need to change to be stage-appropriate as you grow. And if you manage that right, then your mentors turn into friends and then you can get new mentors along the way. A lot of your mentors in that middle stage kind of become your investors and board members. And then at some point that gets awkward. Because when you’re going to your investors and board members for mentorship, at some stage, it gets a little bit weird. And so now at a later stage company, we’re finding more traditional coaches. I never thought I’d need a CEO coach or a team coach. At that scale, you kind of need an independent voice.
Tope: I’ve been really lucky. It takes a village to build anything that’s worth anything. But I guess what I found is that, you know, folks in the south in Atlanta are just really, really kind and generous. And if you ask for help… I can’t think of a single person I’ve reached out to that has not offered their time and advice.
Tim: We don’t get on this stage without massive help. I mean, investors, friends, prior colleagues, new people that I met through co-founders… I’ve received tons of help from all of them. So I think when you’re scaling a company like we all have, you have to keep an open mind and you have to look for good advice and information insights… you’re kind of constantly taking it all in.
Vanessa: Are there any groups that you found particularly helpful in Atlanta?
Tim: Uh, for me personally, ATDC, the Georgia Tech incubator, was super helpful. I had spent some time there helping other entrepreneurs prior to starting Greenlight. So I made some close friends with other experienced entrepreneurs there who were EERs or entrepreneurs and residents there. And, uh, you know, I just loved the advice you would get from them. I remember learning from some of them about the importance of being very direct and clear, even when you’re telling someone something they don’t want to hear, because maybe they’re really in love with their idea. Or you need to encourage them to look more at the problem and being able to prove that the problem objectively exists in the market.
Eric: I agree. I’m thumbs up on mentors, thumbs up on coaches. I think coaches as a trend, you know, moving to the east coast, see it all the time. I think it’s a great thing. I have a different perspective though.
I think it’s harder getting good mentors when you’re starting a company than it is hiring engineers. Because often, especially first-time entrepreneurs don’t know exactly what to look for and what you want is someone that’s done it recently that can actually give you advice in the area because there’s a lot of bad advice out there.
Vanessa: I would say as someone who invests and joins boards, I’d be very careful about adding any advisors to your board. I think it’s a bit of a warning sign. If you’re an early-stage company and someone is helping you and they say, “I want to join your board.” I would just slow roll that for as long as possible, because as Kabir said, there’s different advisors and mentors for different stages and being on a board is almost permanent.
Eric: And I, even when people ask me to be an advisor and they’re like, well, would you want to be a board member? It’s like, those are different. And we can talk about how they’re different and why, but think about, you know, what you want from me, as opposed to like, just thinking that giving me a board title is gonna make it more exciting to me. It’s really not. I’m more interested in the equity piece than anything else.
Vanessa: So I have to touch on fundraising because all of you took very different strategies. Some took early fundraising capital. Some took middle-late stage. What led to your fundraising strategy and why did you choose that strategy?
Tim: Well, for Greenlight, building a financial product and bringing that to market, there is a lot of what I call pre-work. You need to have the deal with the bank and the processor and the card network and, uh, you know, gosh, you have to actually build the thing.
So there are a lot of deals required; regulations and laws that you need to make sure you’re compliant with. So we actually raised angel funding, and I would say that’s actually a real positive about Atlanta.
Kabir: I never thought we would raise as much money as we did. It was never my goal. I was in a very lucky position where I was able to fund my own angel round, and all the investors we ended up signing on board… we ended up raising over $900 million in the last three years. So I never actually had to reach out to investors. They all pitched to me. And you know, what worked for me was creating a little bit of being a little bit of an enigma. And being a little bit mysterious and investors would see us at trade show. They would hear that customers are buying from us, but nobody really knew much. And it created this desire and this demand that was really interesting.
Tope: My fundraising strategy was really to never raise money. Somewhere along the way I failed. I bootstrapped Calendly, and by now I’ve told the story a million times… I raided my 401k to start Calendly. And so given that I took this very risky approach to start the business, I didn’t really feel like I diluted myself.
What happened along the way… I ran out of money. I needed money and I got connected to David Cummings and I was still on the fence about raising money in spite of the fact that I needed money. But the fact that David was an entrepreneur himself… he had just exited Pardot and was successful. I thought he would not only be a source of capital, but he would also be an advisor; a mentor to me. And so that made that decision easy.
Eric: I mean, the fundraising process has been interesting. It’s changed a lot. Pendo has gone from zero (eight years ago) to over a hundred million in ARR in less than eight years. We went from a market cap of, in essence, zero to, you know, $2.6 billion.
Vanessa: I wanted to close this with like rapid-fire, one line advice to early-stage entrepreneurs. Who wants to go first?
Tope: Mine is simple: have fun and celebrate the milestones. I wish I would’ve done more of that. I definitely had fun, but some of those milestones just kind of flew by and I wish I would’ve taken more time to savor them. So I encourage you to do that.
Eric: I mean, it’s not always easy to do, but work with great people, like wait for the great people. Don’t sacrifice on the hiring side, whether it’s the co-founder, whether it’s the early engineers, whether it’s your first VP of marketing, whether it’s your advisors or mentors, or even your VCs. Suffer through it for a little while to make sure you get the great people.
Kabir: The easiest thing to neglect is yourself. And you know, something that not a lot of CEOs and founders talk about is their own personal health; their own physical health; their own personal relationships. I got engaged and saw my (now) wife 30 days that year and it was brutal. You don’t have to make those sacrifices in that extreme of a way in today’s world. And I would say it’s okay to prioritize yourself a little bit.
Tim: I’ll say, stay focused and keep an open mind and listen to what the market tells you.
Vanessa: Thank you all so much, it’s been a blast!
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