Are you a seed-stage founder who’s constructing a unicorn?
NFX Founding Companion James Currier wish to prevent a while: Startups that develop into billion-dollar firms have three fundamental types of defensibility.
- Community results: Your product turns into extra priceless as extra individuals use it.
- Embedding: Combine your providers so deeply, prospects “can’t rip them out.”
- Knowledge loops: Collect, course of and act on real-time knowledge.
“That is actually solely speaking about world-changing, big-ass companies with a variety of influence that might be a billion {dollars} or extra in worth,” he mentioned at TechCrunch Early Stage final month. “That’s what we’re investing in. And what I’m speaking about at the moment is just for the individuals who wish to construct these kinds of companies.”
After giving a presentation he’d beforehand shared at Harvard Enterprise College, Stanford and MIT, Currier outlined the psychological fashions unicorn founders undertake and supplied candid recommendation for early-stage entrepreneurs.
“This concept that it’s 99% perspiration and 1% thought shouldn’t be right, as a result of the appropriate thought has energy in it,” he mentioned. “The correct thought on the proper time will appeal to you the appropriate expertise, it’s going to appeal to you the capital — OK, it’ll appeal to you the press that can then appeal to you extra expertise, extra capital.”
Popular culture and tech journalism lionize founders who shoot for the moon, “so most individuals consider having concepts,” mentioned Currier, noting that unicorns like Lyft, Meta and Alphabet merely “copied” present firms. In doing so, they swapped market threat for execution threat, which is far simpler to handle.
“Don’t take market threat — discover issues that individuals need and simply do a greater job at it. That’s the commonest strategy to get to a unicorn firm.”
Techcrunch occasion
San Francisco
|
October 13-15, 2026
In accordance with Currier, who was an angel investor in Lyft, DoorDash and Patreon, NFX critiques about 8,000 offers every year, however solely invests in round 30. “Sixty-five p.c of the concepts we see are in what we name form of the ‘useless zone’ — this space will waste your life’s energies if you happen to pursue the dangerous concepts.”
Simply round 10% of pitches land in “fertile soil, whereas if you happen to get staff, and also you go onerous at it, and also you get a bit little bit of capital, it’s best to have some form of an final result.” He described the remaining 25% as “the in-between group the place I gotta admit, I don’t know … like Airbnb, will individuals sleep on an air mattress in your additional room when you eat your frosty flakes? Perhaps?”
Hold it easy and “simply preserve pivoting”
Airbnb finally succeeded as a result of its founders pivoted away from their preliminary thought and lowered their market threat, Currier mentioned.
“Ninety-eight p.c of all of the Airbnb listings are on twelve months a yr, similar to VRBO,” he mentioned. “VRBO began in 1996. So it wasn’t till they copied VRBO’s concept that it truly labored, as a result of the concept that was working was already there.”
For those who intend to construct a billion-dollar firm, “don’t be connected to the thought, simply preserve pivoting,” Currier mentioned. Shifting rapidly is a key success issue, which implies founders who iterate will at all times get pleasure from a bonus over those that got down to construct best-in-class merchandise. “Nobody’s gonna fund you for 15 years to construct a Ferrari,” he mentioned, “however they could fund you lengthy sufficient to construct a skateboard.”
Holding onto your first thought for pricey life is a positive strategy to fail: “It’s a must to continuously be reevaluating what the thought is,” he mentioned — even after buyers have given you their cash.
Unicorns usually emerge after new expertise quickly disrupts legacy programs, like digital photographs within the early 2000s or the shift to cellular post-iPhone. “It is advisable search for fast shifts in expertise” like generative AI, Currier mentioned. “You’ve acquired two-and-a-half years earlier than the window shuts and many of the straightforward hanging fruit of AI is taken.”
Simplicity is one other key psychological mannequin for startups that attain scale. “Cell adverts for Fb, click-through adverts for Google, SaaS revenues for Oracle — it’s quite simple. All you individuals are too sensible. You retain making your companies too sophisticated.”
The right way to construct a unicorn founding staff
After a sure level, pivoting might not be ample, however deciding when to throw within the towel is “the toughest query to reply,” Currier mentioned. “It’s a must to work out what you and your staff are able to doing. There are all these huge pivots that you could take, however you won’t have the individuals for it. After which it’s an actual tear-down.”
To construct a staff that’s able to executing repeated pivots, Currier mentioned it’s useful to kind startup employees into three persona sorts: commandos, troopers and police.
“The job of a commando is to take the hill, discover assets, make it occur. Don’t fear about something, get it carried out, transfer the metrics,” he defined. Troopers are good at following orders, “nevertheless it’s sort of gradual.” Undoubtedly don’t rent police, he mentioned.
“The one job of the police is to ensure nothing goes flawed, which implies that they’re there to ensure nothing occurs in any respect,” he mentioned. “So when you have somebody in your group who’s a police or a soldier, you could allow them to go discover higher pastures for them. Solely rent commandos. And if you happen to’re not a commando, you’re not in the appropriate job.”
Regardless of the commando ethos he described, Currier mentioned he’s not searching for founders who’ve an overdeveloped sense of confidence within the thought they’re pitching.
“I’m searching for an individual who has outsized perception of their confidence in themselves. If you’re too keen about your thought, that could be a huge crimson flag for me,” he warned. “It’s a must to be versatile to search out the enterprise that permits you to get huge, so that everybody can have the profit long run, not the short-term factor.”
