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What a u-turn!

Chitra Narayanan | Updated on January 20, 2018

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Startups go from unicorns to roaches

In the old economy there are companies that are equated with elephants, jaguars, tigers or foxes. Beasts that evoke respect, fear or grudging admiration. The jumbos have scale and wisdom, the cats are nimble and predator-like, and the foxes are shrewd. But the disruptive startup companies seek to either become mythical beasts such as unicorns or pestilential creatures like cockroaches. Ever since I read about those VCs advising startups to stop being unicorns (growth chasing) and start becoming like roaches (survivors of nuclear winters and holocausts), I have been shuddering. Let’s admit it, I don't like cockroaches.

A unicorn’s characteristic is fast growth, and with a pretty shake of its lovely white head, this beast scorns at the idea of hunting for profit. It just wants to race ahead explosively, gathering funds, even if the way is not very clear. Just like the mythical beast it is rare to spot a firm with a valuation of $1 billion (though of late there are quite a few). A cockroach on the other hand builds slowly and steadily — its whole focus is on survival. During tough times, it can happily live on with minimum resources. It was Flickr founder Caterina Fake who began propagating the idea that startups need to look at becoming roaches rather than unicorns.

With unicorns facing a lot of fire and heat, and having to pivot their strategies, suddenly the VCs who have invested in them are buying the idea of roaches. But roaches are creepy, they are pests that forage in kitchens and live in dirty drains. We want to get rid of them. Do we want these as role models for our tech-driven startups?

Dear VCs, if you want to put your money on mythical beasts and creatures of the dark, something is very wrong in the startup world. If we want steady survivors full of commonsense, what’s wrong with work horses?

Editorial Consultant

Published on April 12, 2016

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