The article discusses the concept of a new metric for measuring startup success, dubbed "centaurs" by Bessemer Venture Partners. A centaur is defined as a startup that has reached $100 million in annual recurring revenue (ARR). The article argues that this metric is more meaningful than the traditional unicorn status (valued at over $1 billion) because it reflects a company’s ability to achieve sustainable growth and endurance.
The author, Mary D’Onofrio, a partner at Bessemer Venture Partners, presents several reasons why centaurs are a better measure of success:
- De-risked: Centaurs have demonstrated the ability to generate significant revenue, making them less likely to fail.
- Sustainable growth: Achieving $100 million ARR is a more substantial milestone than reaching unicorn status, as it requires sustained growth and execution.
- Operational competencies: Reaching centaur status indicates that a company has developed the necessary product, go-to-market, and operational capabilities to support its growth.
The article also offers advice for founders, employees, and VCs on how to align with this new metric:
- Founders: Focus on driving early go-to-market traction and prioritize revenue growth over fundraising milestones.
- Employees: Evaluate startup opportunities based on revenue traction, momentum, and potential, rather than just the last fundraising milestone.
- VCs: Celebrate founders and companies that share revenue numbers and focus on driving early go-to-market traction to justify capital investments.
The article concludes by emphasizing that becoming a centaur is no longer prosaic and requires effort and dedication from startup teams. It encourages readers to strive for this new metric, which reflects a company’s ability to achieve sustainable growth and endurance.