In the technology world, there is a fascination with unicorns – companies with valuations of more than $1-billion.
When a company becomes a unicorn, it’s a badge of honor. This is despite the fact the valuation is subjective – based on investors’ optimism. Becoming a unicorn can have more to do with a company’s perceived value than its finances or potential traction.
In reading an article in the New York Times – The Rise and Fall of the Unicorn – it was hard not to get the impression that unicorns are a false idol.
Rather than being enthralled with a $1-billion valuation, we should be excited about fast-growing businesses.
I’m talking about businesses with revenue and profits. I’m talking about businesses with solid foundations built on products that consumers want and value. I’m not talking about companies that excite investors, even if the prospects are far from certain.
Why the fascination with unicorns? Why does a high valuation attract the spotlight, even if it’s not based in reality? Is it the appeal of an “overnight” success story? Is it the sexiness of something suddenly worth an astronomical amount of money?
Whatever the reason, unicorns are dangerous and unhealthy because they create a false sense of success. Unicorns are only successful in that they’ve convinced a group of people that they are worth $1-billion.
Instead of worshipping unicorns, how about celebrating companies with $100-million of revenue? We could call it the “Century Club” – a club where membership is based on tangible success, not speculation or perceived value.
What do you think? Is it time to kill the unicorn?
More: In this blog post, venture capitalist Mark Suster talks about why he hates unicorns and the culture that they breed.
If you’re looking to jump-start your startup marketing, I can help you make it happen – everything from messaging and brand positioning to strategic planning and content development. I published a book, Storytelling for Startups, that provides strategic and tactical guidance to entrepreneurs looking to embrace the power of story-driven marketing.