THE UNICAMEL
THE PROBLEM WITH UNICORNS
Hey there! Let’s talk about the problem with unicorns. While it may seem like a great achievement to reach a valuation of $1 billion or more, not all unicorns succeed in the long term. Some may struggle to maintain their high valuations or even fail entirely.
UNREAL EXPECTATIONS AND UNREAL VALUATIONS
One issue with unicorns is that they can have unrealistic expectations and valuations. Some companies have tried to pass off traditional businesses as technology-driven innovations, leading to disappointment from investors. WeWork, for example, had to cancel its IPO and sneak into the stock market through a SPAC after the broader investor community refused to pay for its overvalued stocks. After all, fhe fundamentals of office subletting are nothing new.
LACK OF PROFITABILITY
Another problem is the lack of profitability. Many unicorns are still not turning a profit, despite significant amounts of investment capital. While some prioritise growth to establish themselves as industry leaders, this strategy can be expensive and may not be sustainable in the long term. For example, Uber keeps subsidising our rides, but eventually, the costs associated with transportation (petrol/gas, maintenance, etc.) will bring their costs to the level of traditional taxis. Only time will tell if their strategy will pay off and we will keep using their app.
MODERN GIG-SLAVERY
The startup scene has been all about hype, hype, and more hype lately. Investors are chasing after unicorns and often neglecting to do their due diligence before jumping in with both feet. It’s like good marketing and PR can cover up for a lack of actual product, and the “fake it till you make it” mentality is alive and well.
Remember Theranos? They were a healthcare startup that claimed to have a revolutionary blood-testing technology. But as it turned out, the whole thing was a fraud. It just goes to show that if something seems too good to be true, it’s probably because it’s a unicorn.
THE UNICAMEL
Let’s face it, after all Unicorns are mythical creatures, they are not real, and after 12 months into a downturn with thousands of tech people being laid off in tech companies and just having survived a big bank run partially due to interest rate rises and the groupthink behaviour of VCs, it is no surprise that a lot of unicorns have been de-horned.
Don’t you think it is time to move on and shouldn’t we be trying to find another animal to put on a pedestal?
A few weeks ago, while mentoring for EBRD’s Star Venture Program, we had a meeting with Wala from WeCode Land, and she introduced us to a new mythical creature:
Introducing the unicamel!
Pictures by Stable Diffusion
A NEW WAY OF THINKING STARTUPS
The unicalmel incarnates the principles of a startup that has a sustainable business model that prioritises profitability over growth. It requires a smaller amount of funding than a unicorn, with the potential to become profitable and self-sustaining with a smaller amount of investment.
The unicamel has a unique and defensible competitive advantage, such as intellectual property, proprietary technology, or a strong brand. It also has a specific, narrow focus on a particular market or industry, rather than trying to compete in a broad, highly competitive market.
Finally, the unicamel has a more realistic growth plan that focuses on steady, sustainable growth over the long term.
So, while unicorns may be exciting, they’re not always the best investment for venture capitalists. The unicamel offers a new way of thinking about startups that could prove to be a wise investment in the long run.
Picture by Stable Diffusion
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SAFE / ASA
The Ideal Co-Founder
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Valuation: Qualitative Methods
Funders’ Dilution
The UniCamel
