The era of unicorns, startups valued at $1 billion or more, is coming to an end. We are now entering the era of centaurs, where startups achieving $100 million in annual revenue with a clear path to profitability will gain mindshare and traction. The unicorn era was fueled by cheap capital and a focus on high valuations. But the challenges and even collapse of many unicorns has shown the shortcomings of this approach.

Unicorns created magic - for customers with user experiences and for employees with lavish perks. The $1 billion valuation was the key metric signaling success, attracting investors, partners and employees. Centaurs, on the other hand, are more grounded and focused on revenue generation. Achieving $100 million in revenue with a path to profit is seen as a significant milestone and a better measure of success than a billion-dollar valuation.

The shift from unicorns to centaurs changes the focus from the balance sheet to the income statement. Building revenue and profitability becomes the primary goal. Startups should prioritise growing revenue and fortifying the sales pipeline rather than relying on fundraising. The emphasis is on building a sustainable business for customers, rather than solely focusing on valuation.

Scale, while still important, was often only a metric to justify valuation. Strong value propositions building loyal customers generating sustainable revenues are even more important. The network effect, where happy customers create a sales flywheel, becomes crucial. Sales networks can provide support and references required to grow markets consistently and on a regular basis, while fundraising decisions happen less frequently.

Profitability is essential for sustainable success. Startups without profits and positive cash flows have limited lifespans. During the unicorn era, access to capital allowed unprofitable businesses to continue operating. Companies grew in the short term in the hope of achieving a profitable scale in the long term. In the centaur era, profitability needs to be addressed earlier and with more rigor.

Resilience is also critical in the new era. Startups need to be even more adaptable and find new paths to success. While confidence is important, humility is necessary to plan for potential setbacks. Building a business that can withstand challenges and bounce back, is essential.

Looking ahead, revenue-based M&A opportunities will gain importance. Market perception will shift from valuation to revenue, and companies with strong customer bases will have an advantage. Just as a centaur is an unexpected combination of human intelligence with the strength of a horse, established companies will seek opportunistic acquisitions to add intelligence to strengthen their core businesses, leading to unexpected combinations of industries.

In this new era, believability and trust will be paramount. Marketing and communication strategies need to focus on honesty and fairness, rather than idealised claims. Startups should now aim to be centaurs, focusing on solid structures, revenue generation, and long-term success, rather than chasing unicorn status.  Looking ahead, the winners will be the ones who are able to keep it at 100!