On March 19, 2022, AAIA hosted a webinar about success factors for unicorn companies. The speakers are Mr. Chun Xia, Founding Partner of TSVC Venture Capital, and serial entrepreneur Mr. Fuyong Zhao, Founder and CEO of Cassia Networks.

About TSVC

TSVC started in 2010 from helping the local entrepreneur community in Silicon Valley; TSVC has made 200 investments, has seen 4 IPOs and 8 unicorns from its portfolio companies, which made TSVC the most successful seed stage investor in cultivating unicorns. The TSVC inventors possess strong industrial domain expertise and entrepreneur experiences.

Part I – Lead by Chun Xia

The three factors accounted for the success of unicorns: timing (on market), positioning (of technology and product) and team.


Bill Gross of Idealab believes timing accounts for success or failure more than idea, funding or business models; the world must be ready for what you are offering. The underlying meaning of “timing” is two folded: 1) The momentum of the market is a massively scaled action that can change customers’ perceptions and behaviours, which can not be reversed by entrepreneurs’ efforts; 2) opportunity for every market entry comes with a time window.

A good example is 911. As a disastrous event, it changed public perception of security on massive scale in US. Another example is COVID-19; the outbreak of COVID-19 forced quick acceptance of remote work, learning and virtual life around the world. Both events triggered massive impacts on human perceptions and behaviours; impacts on such scale can not be intentionally created by marketing efforts of any personnel or company. We call them “Signal Events”; the momentum created by the signal events has lasting impact on market for 5-10 years. 911 triggered market for security technology; despite the stock market downturn post 911, Netscreen, a company specialized on firewall hardware technologies embraced tremendous growth and successfully went IPO.  Take 2008 financial crisis as another example; the crisis slowed economic growth and depressed liquidity, the desire for cash incentivized acceptance of sharing economy. Two major companies representing sharing economy, Airbnb and Uber, started in 2008 and 2009, respectively. Although similar business model was tested as early as 2001, sharing economy did not receive favorable market response due to wrong timing. The recent example is remote work market triggered by COVID-19, in which Zoom grew massively; trends of “remote everything” boosted growth of Robolox and the concept/business of Metaverse.

Entrepreneurs and investors need to predict the future 5-10 years from the Signal Events. For example, the world-wide currency over issue post pandemic led to emergence of financial bubbles, and the new 10 year economic cycle after the bubble means many new opportunities. The most recent example is the Ukraine war.  The geo-political conflict changed perceptions of people around the world, challenged globalization, which may bring new economic trends divided by hemispheres, and huge business opportunities.

The timing of market for Zoom – in 2011, TSVC invested in SaaSbee (Zoom’s name back then) and became its first institutional investor. Why did we invest in Zoom so early? The Signal Event started with the release of the first iPhone in 2007; in 2011, the broad use of smartphones was prophetic for the enterprise mobile market, but the market lacked a killer app for corporate use. We believed in the potential of Zoom because of the timing.

Positioning of Product

To find the most advantageous positioning in the momentum triggered by Signal Events, entrepreneurs need to rely on their products, not business models. Your positioning will decide your status on the market. The most advantageous positioning should first support your product-market fit, should divert from “red ocean” markets, and avoid the fields that your team has no expertise in.

The positioning of product for Zoom – when we met SaaSbee (Zoom) in 2011, its first positioning was as a provider of mobile video chatting tools for Facebook users. It was not an advantageous positioning because of the crowded market, and lack of consumer product expertise in the team. With suggestions from TSVC, SaaSbee pivoted its positioning to developer of enterprise mobile video meeting apps (a “blue ocean” market, and the founder Eric Yuan had technical/operation experience from Webex). According to research from UC Berkeley, an average startup company experiences 1.4 pivots before settling on final product positioning. It is a common learning process for startup companies.

Positioning of Technology

Advantageous positioning also comes from technologies with high barriers. Most such technologies require at least 10 years of background. Interestingly, for a disruptive technology to secure commercial success, positioning of technology and timing of market are both critical.

Bad timing (too early) for a disruptive technology can be detrimental; a famous example is Jerry Kaplan’s Go, the company that developed the first tablet computer in late 1980s. This disruptive product failed despite receiving huge investment. It was too early for the market. It was not until 2010 was Apple’s iPad introduced to market and became a huge success.

The positioning of technology for Zoom – Zoom independently developed its own codec and established its technical barriers. The technology ensures Zoom to support high resolution video under 3G mobile network, and ensures superior product performance as well as user experience. The advantage in positioning of technology was not compromised during Zoom’s pivoting from toC to toB, which secured Zoom’s commercial success in right timing of market.


Only a strong team can make full use of the perfect timing and advantageous positioning. The team is the most critical factor accounting for the success of a startup.

The team of Zoom – SaaSbee seized the timing of the mobile market. At the beginning, the team of SaaSbee focused on technology, did not accept the concept of MVP, and faced setbacks on toC market. Nevertheless, Eric Yuan with the team decisively pivoted the company’s positioning to corporate service, and renamed the company as Zoom. The execution capacity of the Zoom team realized opportunities came with great timing and positioning. Forbes has named Eric Yuan as “the Best CEO”.

Factors of a Strong Entrepreneur Team

We need a team with complementary skill sets and work harmoniously, execution, vision and learning ability; ability to influence customers, investors and employees. The team should be coachable and have integrity.

In summary, we discussed the three factors that accounted for the success of a unicorn: timing of market, positioning of technology and product, and team. Of the three factors, team weights greater than positioning, and positioning weights greater than timing.

Part II, Led by FuYong Zhao

A Founder’s Perspective on Timing, Positioning and Team

About Timing of Market: Being 1-2 years ahead of the curve makes you a pioneer, while being 10-20 years ahead of the curve makes you a martyr. The ability of timing is critical. Our first startup focused on Wi-Fi routers for corporate use; it did not gain huge success until the trend of 3G+Wi-Fi started in China, when telecom companies started using Wi-Fi to supplement 3G signal coverage. We started collaborating with telecom companies’ R&D departments early, as a result, in the nationwide call-for-proposal in 2008, our company was the first successful bidder, outperforming major corporations such as Cisco and Huawei.

About Positioning of Product: we have experienced pivoting of positioning as well. Our current company, Cassia Networks, focuses on blue-tooth technology solutions, and has pivoted 1.5 times. We started with a family –targeting toC market, but soon realized that the customer needs were not strong enough.  Nevertheless, we received inquiries for collaboration from many major corporations, including Phillips and Honeywell, therefore we pivoted our positioning from toC to toB.  We further precisely focused our specialty in certain industries: industrial IoT and digital healthcare.  That was the 0.5 time pivoting. For an early stage company, it is taboo to spread your resources too thin.

About Team: a team that is not united and focused will not go far. I have two examples, Hewlett-Packard from the US and SONY from Japan. At the start-up stage, HP and SONY did not have special focus, but their superb teams found directions after a few years’ exploration, and made massive success. Not every company can mimic HP or SONY; only the company with an extraordinary team would create its own timing of market and advantageous positioning of product.

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