Once, every tech start-up wanted to be a unicorn? But could the age of the unicorn be at an end? And what will replace them?
For the past few years, much of the talk for new technology start-ups has been about achieving the moniker of a ‘unicorn’. Many have tried, plenty have failed, but there are as many that have succeeded.
However, as many people warned, the constant rise of the ‘unicorn’ was always going to come to an end. And even some of the big name unicorns from the past few years have lost this particular title.
So, is the age of the unicorn at an end? And what is coming next to take their place?
Rise of the Unicorn
For those of you still unfamiliar with the term, a unicorn is a technology start-up company, which reaches a valuation of over $1 billion. The companies are characterised by rapid growth, and are generally privately funded, either through VC, or other routes.
The issue with unicorns, one that investors were aware of from the start, is that they are not profitable. Well, at least to begin with. Most unicorns aim to prove concept, and grow market share, before making any money.
Valuations tend to be based on future projections of worth, which is why truly defining a unicorn is tricky. Currently, the Wall Street Journal lists 155 unicorn firms, Fortune 174, and VentureBeat 229.
There are plenty of recognisable names on these lists. Uber, Airbnb, SpaceX and Dropbox, to name but a few. Many of these companies also appear on lists of organisations still considered to be disrupting their respective industries.
It’s probably easier to argue that companies like Facebook and SpaceX, unicorns of the past, have surpassed that title by being profitable in their own right. And profitability, after all, is surely the key.
Pop! Is that a Bubble Bursting?
When we first visited the topic of unicorn organisations a little under a year ago, we did highlight vulnerabilities in this set up. Venture capitalists and their investments are as much susceptible to market changes as any other business.
And given the global uncertainty that has been prevalent in 2016, many investors are looking for safer options. And this decrease in available funding has already seen a major impact amongst unicorns.
The pre-IPO investment firm Sharespost published an analysis in August that concluded that 30 per cent of all unicorns would lose their billion-dollar net worth. Some already have, and some have been pushed down that road in the past 9 months.
Big name companies like Theranos (once a unicorn, now subject of media interest for all the wrong reasons) and Evernote have already had valuations written down. Even Twitter and Uber have lost some of their valuation (though not enough to take them under the magic $1 billion mark).
Rise of the…Cockroach? Really?
Yes, really. Well, if you’re looking for a survivor, it’s well known that cockroaches could probably survive the apocalypse!
It might not be as glamorous a title, or an image, but the cockroaches are here to stay. Cockroach organisations differ from unicorns by having slow and steady growth, a closer eye on spending, and steady profits.
Cockroaches exist where funding doesn’t come as easily, but they can be smaller, more agile, and better prepared for uncertainty. And with smaller budgets, they are regarded as being more creative than their unicorn counterparts.
For investors, this represents a safer option, and a potentially better return in the long-run for them and their clients. While some unicorns will make it, and make it big for their investors, cockroaches are seen as a safer investment, something that is welcome in volatile markets.
Where will we be in another year? Who knows. We can’t predict which companies will still have their unicorn title, and which will be falling back. However, the chances are that the cockroaches are here to stay.
Cockroach or unicorn – which would you rather be involved with? Is the age of the unicorn really at an end? Let us know your thoughts below.
While you ponder that, here are this week’s procurement and supply chain headlines to keep you going.
Bangkok Fire Trucks Belatedly Enter Service
- A fleet of 176 fire trucks are to finally enter service in Bangkok, a full 10 years after they were purchased.
- The trucks have locked up in a warehouse for over a decade due to a prolonged legal dispute.
- The Austrian-made trucks were locked up soon after delivery as part of a wider corruption scandal involving senior government ministers.
- Due to their age, the trucks require extensive maintenance before they can be put to use.
Read more at The Nation
Self-Driving Delivery Boats to Ply Amsterdam’s Canals
- The Amsterdam Institute for Metropolitan Solutions plans to use the city’s extensive canal network to trial a fleet of autonomous boats.
- The floating robot vehicles will deliver goods and provide driverless transportation for people along the canal network.
- The boats can also be linked together to provide on-demand bridges and stages.
- Amsterdam’s research into robot canal boats parallels the proliferation of self-driving cars in the US and elsewhere.
Read more at The Verge
Amazon Business Hires White House Procurement Head
- Amazon has hired the former head of the Office of Federal Procurement Policy, Anne Rung, in a bid to increase its sales to government agencies.
- The role, titled Global Leader of Public Sector Sales, will focus on helping Amazon win government purchasing contracts.
- Rung will work closely with government buyers to purchase goods and services more efficiently.
- In her Federal role, Rung reportedly saved taxpayers more than $2.1 billion in procurement spending by reducing duplication.
Read more at B2B eCommerce World
30 Under 30 Programme Goes Global
- ISM and THOMASNET.com’s 30 Under 30 Supply Stars programme has returned for its third year.
- The programme celebrates the achievements of young professionals in Procurement and Supply chain, with the goal of attracting more Millennials into the profession.
- This year, for the first time, the competition has expanded beyond the US to include nominations from around the world.
- Judges are looking for multitalented professionals who are influencers and trailblazers in their organisations.
Read more and Nominate at THOMASNET.com