UPDATED 12:00 EDT / APRIL 24 2014

Chasing unicorns : Analyzing talent at the fastest growing companies

chasing business unicorns in a suitIn “Welcome To The Unicorn Club: Learning From Billion-Dollar Startups,” Aileen Lee suggested that only .07 percent of venture-backed consumer and enterprise software startups ever achieve billion-dollar valuations. That’s one in every 1,538 companies that have taken seed funding since 2003. The lesson is that while venture capital produces many singles and doubles, home runs are incredibly rare occurrences.

While fundamentally agreeing with Lee’s analysis, Fred Wilson believes the actual number is somewhat higher, and he posted a hackpad with a longer list of billion dollar startups (anyone can contribute). Nevertheless, his exercise reinforces the point that still only a tiny number of startups ever turn into billion-dollar “unicorns.”

Building on this foundation, I wanted to learn more about what makes these valuable companies so unique, particularly those that play in the enterprise space in which I specialize. I filtered out the enterprise unicorns (38 in all, although I also compare them to big consumer companies in the second diagram below) and then pulled in the company signals we apply at Infer to evaluate company quality and potential. These include factors like industry, number of customers and types of products offered as well as LinkedIn data for employee information.

There are many ways to slice and dice with this data, but for this post I want to focus mostly on talent.

First, I narrowly defined a talented employee as one who graduated from the top five most entrepreneurial university programs (Stanford, MIT, Berkeley, Harvard and Harvard Business School). While this is obviously not a comprehensive list, it enables us to work with a tight definition to keep the analysis relatively straightforward.

By running advanced search queries through LinkedIn, I determined how many individual profiles (via number of search hits) there are in each company and how many of those people graduated from these top programs.

My results are summarized in the following tables:

 .

Fig. 1 Top Enterprise Unicorns by Talent

Vik1

Now, let’s compare these unicorns with selected large companies in both the enterprise and consumer markets – which I call Heavyweights – as well as with cuts of the Fortune 1000 list.

 .

Fig. 2 The Heavyweights by Talent

Vik2

Here are just a few insights I took away from this analysis:

● 70.2% of enterprise unicorns provide free product offers such as trials, freemium versions and downloads.

● Enterprise unicorns have a median of 562 employees.

● You’re ten times as likely to bump into some who graduated from a top university at an enterprise unicorn as at a Fortune 100 company.

● Among the Heavyweights, Salesforce.com has a greater representation of top talent than any other enterprise unicorn.

● Dropbox, Box, Palantir, SurveyMonkey, Facebook, Twitter, LinkedIn and Google have remarkably high shares of talent given their large employee bases. Facebook would actually rank fourth on the enterprise unicorns list and Google 11th they both have many more employees than other companies on the list.

● The total number of highly talented employees at the eight select heavyweight unicorns in Fig. 2 is nearly equal to the total number of talent employees across the Fortune 50 combined!

 .

Caveats:

● LinkedIn hits may include investors (but that shouldn’t account for many profile hits)

● Some of these companies have been acquired, which resulted in significant personnel changes.

● The headcounts for Linkedin and Box (via Linkedin search hits) were abnormally high. This is probably due to the fact that “box” could match many company names and profiles of Linkedin employees mention that company’s name more often than profiles from people in other companies. In these cases I restricted the search hits to just those in the zip codes of each company’s headquarters. This may result in undercounting, but the figures look more in line with numbers found out in the press.

● The headcounts for Google, Microsoft, Yahoo!, Facebook, IBM, Oracle, and Salesforce.com (Fig. 2) are so large that have many employees that don’t have profiles on Linkedin. So, to determine their company sizes, I used Wolfram|Alpha.

● There’s likely a strong geographical bias in the results because Berkeley and Stanford are in the San Francisco Bay area and MIT and Harvard are in the Boston area. Companies located in these areas are likely have graduates of those institutions.

● Linkedin search results can vary by 50 hits for any given company within a week, so the total number hits is not precise.

 .

About the Author

Vik Singh is CEO & co-founder of Infer, a provider of data-powered business applications that help companies such as Box, Jive, Tableau & Zendesk win more customers. You can follow Vik on Twitter @zooie.

feature image: davitydave via photopin cc

A message from John Furrier, co-founder of SiliconANGLE:

Your vote of support is important to us and it helps us keep the content FREE.

One click below supports our mission to provide free, deep, and relevant content.  

Join our community on YouTube

Join the community that includes more than 15,000 #CubeAlumni experts, including Amazon.com CEO Andy Jassy, Dell Technologies founder and CEO Michael Dell, Intel CEO Pat Gelsinger, and many more luminaries and experts.

“TheCUBE is an important partner to the industry. You guys really are a part of our events and we really appreciate you coming and I know people appreciate the content you create as well” – Andy Jassy

THANK YOU