Private companies typically don’t like to comment on their supposed valuations. But what many of them are willing to discuss is the effect that those big valuations have had on their reputation, their employee morale, their future, their entire business. A $1 billion valuation means different things to different executives.
Our Unicorn List will involve tracking these fast-growing, highly valued startups. We reached out to the founders and CEOs and asked a few questions. What does having a billion-dollar valuation (or higher) mean to you and your company? How does it change the way you operate? Is it a sign of success, or added pressure? We also asked about challenges and roadblocks along the way. What was your lowest moment or biggest obstacle on the path to where your startup is now?
We even asked them, if they were willing, to tell us about the moment when they closed the round that resulted in their most recent valuation, and where they were, and how it felt.
Here are some of the most colorful responses.
And be sure to read the cover story of our new issue: The age of unicorns.
Kenneth Lin, CEO, Credit Karma
“A billion-dollar valuation can be a double-edged sword. On one hand, it’s great for recruiting, brand recognition, and employee morale. On the flip side, big valuations often lead to more scrutiny from outsiders and sometimes they hinder innovation. There are quite a few low points in the life a startup. We were almost shut down 38 days after launching. We ran out of money on multiple occasions. Our biggest challenge was proving we weren’t like the other guys.”
Jyoti Bansal, CEO, AppDynamics
“It’s not like winning the lottery. There’s not a phone call you get and suddenly you’re a billion-dollar company. It was a process that took several months. It’s like making the playoffs—we haven’t won the championship yet, but a ‘W’ is in sight. The biggest mistake people can make in these situations is to celebrate and forget that there are still more big and important games ahead.”
Kunal Bahl, CEO, Snapdeal
“As we know, in the tech space, things yo-yo quite drastically, so you need to keep a balanced mind about valuations. However, there is always a feeling of disbelief that we created a company that is worth the kind of valuation that we only read about in Fortune. Just a few years ago we were working out of the 200-square-foot basement of a house in a run-down furniture market in New Delhi. Less than two years ago we were down to less than $100,000 in the bank.”
Stewart Butterfield, CEO, Slack
“We drove the valuation, so it wasn’t a surprise, but now we have to get to work. It’s a good thing for the business for sure, but if you work here, I try to make sure everyone feels the pressure that comes with it. It’s a positive feedback loop. You get the high valuation, so it’s easier for us to higher smarter people, so it’s easier to deliver on the product side, so it’s easier for us to grow. It definitely helps.”
Michelle Zatlyn, Co-founder, Cloudflare
“Our valuation is something we’ve never focused on internally. It’s just not a topic. It’s a moment to step back and say, ‘Wow, this is what other people in the market perceive that you’ve built.’ Even when things go really well—and again I think we’ve been very fortunate—bad things happen all the time. [I want to] make sure that we reach our full potential. That weighs on my shoulders.”
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