The dotcom boss There was an explosion of startups that seemed to change the world. Only a few have survived, and now we are looking at a similar scene. The question, of course, is which companies will make it out alive and become real giants.
Unicorn humility everywhere. More than 1,500 private companies in the US now exceed a $1 billion valuation. That makes them within the select, not so much, “unicorn” group. according to FT *. Although all the facts of the unicorn seem easy, they are not. Less than 1% of the startups in which venture capital is invested end up becoming unicorns.
What is a really great company?. As Bain & Company consultants explain, the selected companies entering the super market mean exceeding $10 billion in annual revenue and at least $1 billion in cash flow. Almost none of those startups that have reached the level of “unicorns” have managed to reach such figures.
As two examples. Among all the US companies founded in the last 20 years, only Meta and Uber have managed to advance the threshold of large companies. Between 1990 and 2003, the internet boom spawned six such giants, including Tesla, Amazon and Alphabet. In Spain we also experienced a great boom in this area: in 2011, the humility of no less than 11 unicorns.
Investment through the roof. Never before has so much money been invested in all kinds of companies. Running unicorns have raised as many trillions of dollars; especially in 2011while interest rates in the US were almost non-existent. Rhythm and came down a little laterBut the rise of AI has again rocked investments.
A great beneficiary. Recent OpenAI’s $6.6 billion round He made his assessment of the rocks to 157 billion dollars. Only ByteDance (creator of TikTok) and SpaceX surpass it.
Founder mode, or not. Some experts believe that startups created by young entrepreneurs no longer make sense, and some demand that these projects can be managed by experienced managers. Venture capital investor Paul Graham disagrees and was challenged a few weeks ago an interesting discussion about “Founder mode”. He suggests that the new ones who succeed are those who circumvent the rules of traditional management.
But becoming great is another story.. Whichever path is chosen, unicorns rarely make it to the top. The issues of many startups – sought after by large companies – are frequent. In fact, despite the diversity and the significant number of “unicorns”, the combination of powers between large technology companies is worrying. Very few survive if they fight against established societies; TikTok is a good example of thisbut, as we say, it is not common. OpenAI is openly threatened: it has many millions of dollars in losses and it is not clear how long it will be able to maintain this situation.
How many unicorns still live in 20 years? It is a great problem, because it is not only that they create great companies: the businesses with which they are born gain their power over time. Things that are fashionable and viral today may not be in 20 years. And in the world of technology, that’s more than likely not the case. Likely Apple, Amazon, Meta, Microsoft or Google it is still in 20 yearsBut will OpenAI or TikTok do?
Image | Xataka with Midjourney
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