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Investors will tell you that they love to put money into startups that are scalable, and ready to become the next unicorn. But what does that really mean? Simply stated, it means that your business has the potential to multiply revenue with minimal incremental cost. Ready to scale is when you have a proven product and a proven business model, about to expand to new geographies and markets.

A software product is a classic example of a scalable solution, since it costs real money to build the first copy, but unlimited additional copies can be quickly cloned for almost no incremental cost. Most consulting services, like marketing, are not scalable, since they must be delivered by experts, and cloning experts is slow and expensive. Investors don’t invest in services startups.

Here are some pragmatic tips on how to make your startup more scalable and investable:

1. If you need investors, start with a scalable idea. Just because all your buddies think an idea is cool, that doesn’t mean it is scalable. Investors like ideas based on market research from outside experts, like Gartner Research, proclaiming a billion dollar opportunity with a double digit growth rate. These are more likely scalable and investable.

1. Build a business plan and model that is attractive to investors. I see too many business plans that are really product plans for customers, touting free services and long feature lists. It’s hard to build and scale a business on free high-support products. Scalable businesses have high margins (over 50%), low support, and minimum staffs.

1. Use a minimum viable product (MVP) to validate the model. No product, even with a large opportunity, is ready to scale until you can show it working, with multiple customers paying the full price, to validate the business model. Count on multiple pivots with real customers, before you get it right, before you ask for investor money to scale.

1. Build a strong team to take yourself out of the critical path. If you are still spending most of your time working “in” your business, rather than “on” your business, then you are not yet ready to scale. Show that you have and can continue to hire the right people to run the scaled business without you being everywhere and making every decision.

1. Outsource what is non-strategic to optimize leverage. Smart entrepreneurs never outsource their core competency, and never rely on intellectual property they don’t own. They also don’t try to do everything in-house, since growing all the expertise you need is slow and expensive. Scaling requires leveraging outside resources.

1. Focus on marketing and indirect channels to get the message out quickly. Direct marketing is generally not scalable, especially on low-cost high-volume products. These days, heavy marketing is always required to make your startup visible and scalable amid the flood of information from all sources to all customers. Word-of-mouth does not scale.

1. Automate to the max. A startup that is labor intensive and staff intensive is not scalable. Start early looking at production automation, proven process technologies, and minimum staff approaches, before you begin scaling. Document processes and build online training videos so new people can come online quickly and consistently.

1. Attract and relish investor funding. Organic growth (reinvesting profits only) will not allow you to build the “hockey stick” growth curve desired by premium buyers at exit, or financial analysts positioning you for public stock sale. You will give up some control with investors, but their expertise and experience is usually more than worth the cost.

1. Consider all possibilities for licensing and franchising. Many markets already have major players, so figuring out how to make them partners is much more effective for scaling than trying to out-market them. In other areas, once you have a documented and proven model, franchising will let you scale much faster than managing every location.

1. Define a business that is open-ended and continuously improving. If your startup sounds like a one-trick pony, it won’t be perceived as scalable. Don’t try to solve every customer problem at the same time, but build a strategy and plan that shows continuous innovation, leading to follow-on complementary solutions well into the future.

Let me make one thing clear – not everyone needs or wants investors, or a highly scalable business. Ninety percent of small businesses today are family businesses, which can be very successful, satisfying, and small by design. It’s a strategic decision. If your passion is to change the world, or even dominate an industry, scalability is the only way to multiply your arms and legs, and the hours in your day. Are you feeling the need yet in your own startup?

Marty Zwilling

Unicorns used to be rare. They used to be big news. Not anymore. They're everywhere you look: they help you stream new music, find a ride across town, get a room for the night, and share content with friends, family, and colleagues. I'm talking, of course, about the billion-dollar-plus tech startups. From Uber, snagging a $50 billion valuation, to Spotify, nearing an $8.5 billion valuation, they're members of the so-called "billion dollar" or "unicorn" club.

What are rare, though, are the "startup CTOs" who serve these businesses. Although these companies are always making headlines, it's not as easy to find information about the chief technology officers who run and operate them so successfully. So I decided to do a little digging (a.k.a. social stalking). Who are the technical leaders behind these super-sized startups? What skill sets have they developed to be able to help these companies scale so fast and be so successful? How did they get to where they are?

The role of a startup CTO

Probably even more critical to startups than to established companies, the CTO makes sure that the technology conveys unique value to the user. The most successful startups are able to convey that value rapidly, going viral with something users never knew they needed and now can't live without.

A CTO most commonly presides over new and original technology. Paul O'Neill expressed this as the ability to "identify, access, [and] investigate high-risk, high-return technologies," as opposed to adopting existing tech. That makes the role of CTO absolutely vital for web-based startups, because the user interface is pretty much the "store front" of the business. The recipe only sounds easy: 1) provide a friendly, fast interface to what you offer; 2) attract customers; 3) repeat at increasing scale.

The CTO at a startup has to establish and then help code a unique relationship between the technology and the larger environment. What they code and manage the development of is the new idea that scoops the competition, requiring them to be business-savvy product geniuses, as well as tech visionaries.

16 hottest and most valuable unicorns

Who are the hot (and some of the most valuable) unicorn companies? Let's take a look. (Valuation estimates are based on data being tracked by the Wall Street Journal and Dow Jones VentureSource). Note this is not a comprehensive list but rather a filtered list of some of the "hottest" billion-dollar startups on my radar.

7 CTOs you should follow

I can't discuss all 16 of these companies and do them justice, but here are seven of their CTOs you might want to follow.

Bobby Murphy (@hellobobby) —CTO, Snapchat

Does graduating from a world-renowned university guarantee you'll be a success? Like, at anything? Of course not. But for many unicorn CTOs, their foundational experience came during that 18- to 22-year-old phase of life known as college. It was at Stanford University that Bobby Murphy met Evan Spiegel. Along with Reggie Brown, they founded Snapchat in 2011.

It wasn't just that they met at college. Brown and Spiegel developed the initial idea for Snapchat as part of an actual course assignment, and they brought in Murphy to write the code. Murphy finished his degree in mathematical and computational sciences, while Spiegel dropped out with only three classes to go—not unlike a famous Harvard dropout from a previous generation, who founded Microsoft. Murphy is known as monk-like, according to sources at Mashable. Quiet, dedicated, studious—that's one approach to success. He has also been called "the brains" behind Snapchat. A year ago Murphy and his partner turned down a $3 billion bid by Facebook.

Thuan Pham —CTO, Uber

On his LinkedIn page, Thuan Pham says that success is much more likely (and getting there is more fun) "when we have a healthy, engaged, and talented work force led by leaders with unquestionable integrity and full transparency. These are my deeply held beliefs, and I strive to uphold these core values in everything that I do, every day." As the head of engineering at one of the fastest-growing startups in the world, Pham believes that his team is "reinvent[ing] the landscape of urban transportation and logistics," and they're doing it at a global scale.

As the VP of R&D at VMware for more than eight years, Pham worked in a variety of leadership positions that took him from a general infrastructure perspective to focusing on cloud management. Pham is a leader who stays on top of emerging technologies and is willing to extend parts of the business to new platforms. This takes courage. The payoff may simply be that you learn what doesn't work. But in his case, great instincts, combined with a winning management style, have helped put Uber at the top of the startup heap.

Nathan Blecharczyk (@nathanblec) —CTO, Airbnb

CTO and cofounder of the do-it-yourself lodging website Airbnb, Nathan Blecharczyk earned his degree in computer science at Harvard before paying his engineering dues at Microsoft and other companies. At Airbnb, he "oversees the technical strategy of the company, and is dedicated to building a team of world-class engineers to keep Airbnb at the forefront of the industry," according to the company website.

Nathan's LinkedIn profile is spare, but the numerous and diverse technologies he lists as specialties read like a geek's dream. Great CTOs are often the folks who stay up late, do their homework, and don't crow too loudly about their achievements. It's somehow appropriate that he describes his company with only one short sentence: "Travel like a human."

Arash Ferdowsi (@arashf) —CTO, Dropbox

This cofounder of Dropbox was included on Fortune's "40 under 40" list in 2011 and on Inc.'s "30 under 30" list the same year. Described by The Kansas CityStar as "one of the youngest, richest people from [Kansas] that you've never heard of," Arash Ferdowsi has been too busy over the past few years to care. In the same article from the Star, Ferdowsi attributes much of the company's success to luck: "... if we had made some opposite decisions of what we did, you wonder if we would even be where we are right now." That sort of quiet humility characterizes many of the unicorn CTOs here.

There was a short but nice story about Arash on Forbes worth reading: Dropbox Is Under Siege -- But It's Not Slowing Down

Like others here, Ferdowsi attended a top-flight university: MIT in Cambridge, MA. He connected with other students who connected him to the originator of the Dropbox concept, and they were off to the races in a matter of hours. Seizing on an opportunity and, well, dropping everything else (both Ferdowski and cofounder Drew Houston dropped out of MIT before graduation) exemplifies the nothing-else-matters passion you see among these CTOs.

Oskar Stål (@OskarStal)—CTO, Spotify

On his website, oskarstal.com, Stål describes himself as "born and raised in a suburb east of Stockholm in Sweden, so yes I am a burb-guy like most of the people I know in Stockholm." As Stål describes it, he's just a regular guy who loves his wife and two daughters, the ocean, and walking in the woods. You'd never know from reading 99 percent of his content that he's the CTO of one of the most successful music streaming services—ever.

What he says about himself on LinkedIn is equally spartan: "I started out writing software at the age of 12 and then gradually moved into working on larger and larger projects becoming more of a leader than an individual contributor." I get the feeling that these CTOs don't spend a lot of time looking at themselves in the mirror. There's something bigger out there than me, they seem to be telling us. Find it, and make it work really well. Wired offers a little more of Stål's story.

Greg Brockman (@thegdb) —CTO, Stripe

Greg Brockman recently left Stripe to start his own company but I decided to keep him on the list because of the significance of his contribution to the company's success. His LinkedIn page offers few words to describe his passion, which he sums up as "I love to build." Many software developers seeking a simple way to accept payments via the web within new applications are happy that Brockman loves to build. Making and accepting payments over the Internet is notoriously difficult, a problem Stripe has set out to solve.

In an article Brockman posted last fall on his website, he connects many more of the dots with statements like: "I've never found anything I loved more than writing code, but at the same time I knew we had a responsibility as an organization to support the amazing people we'd hired." In statements like this, we see a familiar expansion from the self outward, toward the business, and toward the people who make it work. The greatness in the code, which all these CTOs love to build and then manage, is finally measured by its ability to support an expanding enterprise.

Solomon Hykes (@solomonstre) —CTO, Docker

He calls himself an "entrepreneur and hacker" on his LinkedIn profile. Wired called him "The man who would build a computer the size of the entire Internet." Whatever you call him, he's a Y Combinator alumnus, a Forbes 30 under 30 listee, and was CEO of dotCloud "through five years of fundraising, business operations, and product launches before focusing entirely on Docker." Docker is an open source, container-based virtualization tool.

In Hykes' words, "A container is just a box...But with this box, you can package up so many software products and platforms and systems that each have their own way of doing things, and you can move them anywhere." Clearly, this CTO is a visionary who lives, breathes, and eats distributed applications. Which means, I think, that he'd rather be labeled the company's CTO (the head techie) than CEO (which he might have claimed, if he weren't such a hacker at heart).

Is there a horn in your forehead's future?

The main trait that unites all these CTOs is a passion for technology and a love for solving problems that have long prevented more efficient solutions. In other words, something people will buy.

And you can't just live on the technical side of things. You need to see and imagine the future. Here are a few themes I see:

• Networking early, whether at college or on the job
• Seizing an opportunity to work with someone else's vision/business plans
• Understanding success is at some place beyond yourself, beyond what you can achieve alone
• Staying focused, sometimes at the expense of everything else (like college)
• Recognizing that the point, ultimately, isn't creating great code but creating a kernel that can grow at the heart of a business

A few years ago, a mentor told me, "Think of your first day at a new job as the first day of training for your next job." Can you see yourself preparing for a CTO position at a cool new startup a few years down the road? If your love of technology can mesh with a clear vision, you just might have a shot!

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