Redefining Unicorn: Why it’s important
As an experienced financial services professional, I am familiar with established norms in finance, so called fundamental truths of valuation, and also the need to stay ahead of the thinking and actions of competitors and the markets.
Living in Cape Town, South Africa, I look to international capital markets, and experts within emerging disciplines that can inform me of important developments, that might augment or change my thinking, and that of the amorphous mass that moves markets.
For many reasons, the US venture capital industry intrigues me, as there is intellectual curiosity, data driven experience, and market fit progress that builds on the productive nature of the US economic system. There is lots to follow, contemplate, and incorporate. All part of forming expectations about our future.
I now spend at least 25% of my time following some spectacular thinkers within the world changing VC industry. It’s a disproportionate amount of time given where my clients capital is invested, but I think essential to understand where we should invest in and for the future. And the future is indisputably involved at the intersection of everyday living and working, and how tech augments both. Certain investors ignore whole industries and sectors, as too hard to analyse. Well-revered giants of the investment industry tout rules, screens, and sage advice to “stay within one’s circle of competence”. Agreed. But we all need to understand how we fit in the fast changing “living and working” space we occupy. It’s about staying relevant.
Leading tech platforms are undoubtedly a potent part of the future. The leverage they can apply is impressive, and the VC industry is adept to identifying and supporting future winners.
However, the breathless, all-consuming, self-important, sensational press coverage of the VC ecosystem and it’s participants is a bubble — too much hype, and not enough value… in the content. The term Unicorn, relating to the level of market valuation of nascent businesses is perhaps the lead steer — going in the wrong direction by focusing on the value of the business, rather than the value the business will add.
Tim O’Reilly nails the topic. It should be about incredible, new, life-changing, and hard to believe ‘ability to add value to billions” businesses. The kind that forever change the way things are done, continue to find favour with customers rather than high growth investors, and become lost in the white noise of life. Without losing their relevance.