Is the term Unicorn losing its value?
There are more than a handful of tech firms every week that gain the “Unicorn” status, meaning they are valued over $1 billion. Now this might not be the case in the Middle East, where funding rounds are still very small compared to those in the hypergiant rounds in the US. So even though the Unicorn status means a lot here, it is losing its value internationally.
There are so many unicorns today that it is no longer a differentiating factor—nor an exciting one. Hence it no longer serves the purpose as a value descriptor.
So instead of defining rarity based on valuation, we need to look for a new marker.
We know that investors inject millions into startups for it to continue growing its market share, while making a loss. Most of the startups are still running in losses for a long term view of tremendous success.
That strategy wasn’t used until a few decades ago, and is no longer unique enough to gain super high returns. What is unique in its face, is making profits.
Contrary to what many believe, there are startups with smart business models that are turning a profit. Zoom and TransferWise are the best examples of startups with scalable technology that are growing and still profitable.
How many others can you name? Not many. Which is exactly why we need to start defining rare valuable startups with a new KPI—Profits. Read more about this concept here.