Only couple of weeks ago, Uber got $1.2B funding on a valuation of $41B! Earlier this year, Facebook paid over $19B to acquire WhatsApp. Dropbox is valued at $10B. All these three companies are less than five years old. What is going on? Is it a tech bubble seen earlier? No, it\u2019s a start-up wealth gap as per Newsweek article by Kevin Maney.<\/p>\n
Here is an interesting finding! A new study, which analyzed valuation data on thousands of tech startups, found that winning companies born since 2009 get to super-high valuations three times faster than companies started in the early 2000s. Looked at another way, this says that if a company is going to reach a $1 billion value, it will do so in one-third the time that climb typically took just a decade ago. Of the 80 companies that hit $1 billion, half are what the study calls Category Kings\u2014companies that define and dominate a new category of business. Uber is a good example of a Category King: It helped create a new kind of business, took the lead in defining it and became the dominant player. A Category King typically takes 70 percent of the total market value of its category. All the rest of the entrants split the remaining 30 percent. Examples of category kings are: Facebook, Google (new page ranking search algorithm), Linked-In, Twitter, Airbnb, Snapchat, Cloudera, Dropbox, Pinterest, etc.<\/p>\n