One cannot be a member of LinkedIn without noticing the never-ending posts and articles recognizing that another company has achieved the near mythical status of being named a unicorn – a title bestowed upon a startup valued at a minimum of one billion dollars. Obtaining unicorn status is indeed rare. A business only has a 0.00006% chance of becoming a unicorn. In 2021, there were 340 startups valued as unicorns. As of 2022, there are 1,000 unicorns worldwide driven primarily by increased investments from VCs and crossover funds like Tiger Global Management and SoftBank, to name a few. Although rare, unicorns have several characteristics in common: *Unicorns are Disruptive. *Unicorns are Tech-savvy *Unicorns are Consumer-focused *Unicorns are Efficient *Unicorns are Growth-driven *Unicorns are adaptable, resilient, and can persevere Last but not least, to become a unicorn, a company must have a rock-solid leadership team, beginning with a CEO that possesses exceptional judgement. Wow. I guess unicorns are special and deserving of all the praise. Or are they? The brutal truth is that far too many unicorns, especially newly minted unicorns in transportation and logistics, have achieved their unicorn status in spite of their faults, and not because of their brilliance. Put simply, the companies are unicorns in name only. This is what happens when you have founders who lack hands-on industry experience, but who’ve mastered the art of fundraising. The unfortunate personality trait that stands out the most among too many of the executives who work at unicorns is vanity. CEOs and founders proclaim they’ve created “integrated ecosystems that allow brands to grow.” False. They’ve made lots of acquisitions but they aren’t an integrated ecosystem. Instead of possessing good judgement, it’s becoming clear that many CEOs are making poor decisions. Until a few months ago, unicorns in transportation and logistics appeared to operate flawlessly. They regaled the press and public with tales of how their latest acquisition or investment in software, gave them superior operating capabilities above and beyond everybody else. It was management by false press releases at it’s finest. What we are witnessing now is the vanity of the unicorns being exposed. On a near daily basis, logistics, software, and rapid grocery delivery companies, are announcing layoffs, an inability to raise additional capital, and a retrenchment of their businesses. Why is this happening? Because capital is drying up. Investors are demanding that the companies they invested in stop the bleeding. Investors are realizing they made the wrong bet. Too many unicorn CEOs misjudged the market; they’re inexperienced hence the large number of layoffs; they have the wrong business model; some unicorns are already obsolete. No amount of interviews or press releases can hide the underlying operational issues.
Source: Brittain Ladd | LinkedIn.com