Unicorns musn’t fall into the trap of the one trick pony
In the last 8 months I have been to see a lot of companies, big and small, and almost always the conversation has meandered from Google to the current set of Unicorns and what the future portends. I thought of writing all my thoughts down, then realized I have too many — so I’ll do it in phases. Here is the first stab — additions and edits welcome.
Having had the opportunity of working with Larry Page, I have been privileged — privileged because I got to work for one of the greatest entrepreneurs in the world, and because I was there when the company’s culture, team and organization were being shaped.
Aaron Levie and his co-founders at Box have lived the full hype cycle of Silicon Valley legend. They dropped out of college to pursue their passion, driving their mini-van to the promised land of the Bay Area, living rent free at an Uncle’s house. Levie himself slept on a yoga mat for nine months, as the team found early traction with a product they created mostly to solve their own technology problem (managing files across different computers).
True to the Valley myth, they pivoted the company to a new market (enterprise), grew like crazy, rebuffed a rich buyout offer that would have made them all generationally wealthy, filed for an IPO, were brutalized by the press as the IPO failed to materialize, then triumphed, after ten years of hard work, with a successful public offering early last year.
How much is that unicorn in the window? Forget about fearing a tech bust, writes 500 Startups’ Dave McClure (Medium) — our next bubble trouble is likely to be in the world of old-line global public companies. These firms are only beginning to realize how thoroughly their universes are changing, and how that change could cut their value. So they’re adopting what McClure calls “the Unicorn Hedge” — the strategy of buying up and assimilating billion-dollar startups, their people and their ideas. The procession of these acquisitions — Unilever and Dollar Shave Club, Walmart and Jet, GM and Cruise — shows no sign of slowing down. What’s driving such deals? The hedge is an effort to buy a little piece of the future, in case these big companies’ stake in the present gets a sudden mark-down. (The accelerating tango between BigCos and NewCos is a focus of our upcoming NewCo Shift Forum in February.)
Fortune smiles on 50 big social-change innovators. Pharma heavyweight GlaxoSmithKline tops Fortune’s second annual “Change the World” list of 50 $1 billion-or-more revenue companies leading the charge in looking beyond a profit-only mindset. The magazine says “shared-value thinking” is going mainstream: BigCos are “moving beyond often-fuzzy notions like sustainability and corporate citizenship, and instead making measurable social impact central to how they compete.” Yes, they’re doing this without sacrificing “disproportionate shareholder returns.” And a lot of them are hiring. Fortune selects its list according to an impressive methodology, yet the rankings still seem a little opaque. The list is probably most useful simply as a compendium of the wide spectrum of approaches companies are adopting, from nonprofit partnerships to corporate governance remodels to clean-tech investments. What Fortune leaves out is a sense of the fertile interplay between these mega-companies and the nimble startups and NewCo ecosystems that so often introduce the innovations the giants run with. Oh, and of course, whatever those same giants might be doing that cancels out their well-intentioned efforts.