The rise of UNICORNS with a SHARK FIN

India made the big leap around 2007- 2009 with the birth of companies like Flipkart, InMobi etc. This was followed by venture capital ecosystem shaping rapidly which led to the birth of several more ‘Unicorns’, like Ola, Paytm, Quickr and Policybazaar, and ‘soon-to-be unicorns’ such as online grocer BigBasket, Logistics network Rivigo, and hospitality chain OYO. Indian startups have gained the attention of global investors like SoftBank, Alibaba, Tencent and others, that have backed numerous late-stage companies recently.

The unicorn surge can be attributed to better internet infrastructure, emergence of smart phone users and several ubiquitous communication platform like iOS and Android that have enabled app-based businesses to scale rapidly.

In the 1980s or 1990s, companies exhibited growth pattern as observed in a Bell Curve where a product/ company takes a five customer segment (image below) lifecycle. Now, markets are defined and conquered with a 'shark fin' burst of domination with just two customer segments. This shortened life cycle is primarily the result of rapidly spreading digital disruption in industries largely untouched by the first wave of internet transformation.

The shark fin adoption can be observed with companies like Swiggy, Flipkart and Ola. The technological improvements (access to internet and mobile phones becoming ubiquitous) have changed the speed at which new innovations penetrate markets. These market disruptive companies do not exhibit the nature of Bell curve taking the five-customer market segments; it is mostly shrunk to two segments- 'Trial users' and 'Everybody else'. The pattern for growth and product adoption with new companies MUST have a life cycle that is not a gentle sloping bell curve but is more like a cliff.

The shark fin curve has sharply compressed the bell curve. There are two reasons the phenomenon took place as described by HBR: 

1.  The customer is well aware of the products (software, consumer etc..) in the market through information available on social media. The lowered transaction cost for customers and customer acquisition, is an outcome of readily available market information on various digital platforms - the customer is informed about your product/ services (before launch or after launch) about what other peers are buying, other substitutes in the market etc.. If the customer sees immediate benefit or use, they will adopt the product/ service immediately.
2. Digital products or platforms become obsolete. With continued improvements in efficiency, price, performance or size, there is a shorter cycle of new versions and innovations. The dramatic pace of technological transformation rather than the orderly evolution of industry standards now determines the speed with which consumers and businesses replace pretty much everything.

            ----------------

As the number of unicorns rise, disruptive products rise rapidly with large customers consuming them. With the shark fin growth curve, companies operate as the flippers of their industry, for example- Flipkart, Ola, Paytm etc.., controlling its speed, direction, and destination. At some point, these companies will need to understand where new disruptors come from, how they enter and exit the market. To maintain market position, these companies have to again launch new products to create a shark fin growth.. again!