Unicorns, Cockroaches, and Startups, oh my

For months it's been discussed ad nauseam that Unicorns are dying. (SquattyPotty might take exception to that!)

I hate to burst your bubble, but I could've told you that was inevitable (and I'm not a professional investor). Putting a billion dollar valuation on a company with no revenue simply because it's started by someone who may have struck oil before is foolish. Investing hundreds of millions into a business void of revenue is similarly foolish. And as they say, a fool and his money are soon parted.

The myopic trend isn't unlike movie studios gambling $300M (production budget along with prints and advertising) on a special effects movie that doesn't make its money back, paying outrageous salaries to movie stars... when instead they could make 10 movies at $30M each, employ 10 times as many people (which helps the economy) and have better odds of seeing a profit.  

Because of this sudden "oh shit" mentality in anticipation of another tech bubble bursting, everyone's now running scared and going to the other extreme. Businesses that succeed don't dabble in extremes. They make sound decisions with realistic projections. Slow and steady always wins the race in the end. But in this world of instant gratification and shortcuts, more people crash and burn than succeed. A unicorn succeeding is like winning the lottery. 

On October 8, CrunchBase’s Daily newsletter invaded my inbox like a cockroach. It highlighted the September 30 article published on Medium.com by Caterine Fake, titled “The Age of the Cockroach,” and suggested that “Cockroach” is the new buzz word replacing “Unicorn.”

CrunchBase also provided a link to a post by Adam of Boost VC: “Be the Cockroach.” Adam suggests that the Cockroach startup is now overtaking Unicorns, Black Swans, and Thunder Lizards.

Now while most of you reading this probably know what these mythological creatures symbolize in the startup world, I did not, and thus had to use my trusted search engine to get up to speed. You see, while I consider myself wise and (wide in the) hip, I stopped caring about trends years ago since everything comes back around eventually, and trends are fleeting, suggesting a focus more on style than substance. I’ve never been easily distracted by shiny objects and only snap my head sideways for a squirrel when my dog is near.

So for the uninitiated, like me, here’s a brief tutorial for each of the above-mentioned mythological creatures as tech metaphors.

Thunder Lizards

I take you back to 2010: "Twitter, Digg investor: Be a Thunder Lizard, don't sell to Google," VentureBeat's article by Anthony Ha. It quotes Mike Maples, Jr. as saying that Thunder Lizard companies “defy conventional venture wisdom” where you either “make small bets for a small payoff, or big investments for a big payoff.” 

He compares Thunder Lizards to Godzilla. They “start out small, but thanks to the power of technology, they’re soon crushing cars – or incumbent competitors.”

Maples was an early backer of Twitter and Digg. He says, “You could raise a tiny amount of money and be hatched by atomic eggs . . . In fact, I would argue that the vast majority of truly great companies have done it that way.”

Maples does add the caveat that, as an investor, there are eight integral elements he wants to see when considering a company’s potential. The first four are its “DNA” (more hip lingo thrown around in tech, just like people calling themselves “Evangelists,” and the current trend to buck “Entrepreneur” in favor of “Innovator” or some other buzz word). 

A company’s DNA must include:

1. Visionary entrepreneur
2. Huge potential market
3. Fundamental advantage
4. Low capital requirements 

The other four factors have to do with attitude:

1. Customer development
2. Complete team
3. Experimental mindset
4. Different, not better

But remember... thunder lizards are dinosaurs. Who would invest in something that's extinct?

Black Swans

No, this moniker wasn’t inspired by Darren Aronofsky’s disturbing 2010 movie starring Natalie Portman and Mila Kunis, as far as I know.

From “Startups and the Black Swan,” an August 5, 2013 École Polytechnique Fédérale de Lausanne (EPFL) article:

"What do natural disasters and unusually successful high-tech businesses have in common? They are both statistical outliers, and they both have outsized impact. This is the concept of the 'Black Swan'."

"Nassim Nicholas Taleb created the concept of the Black Swan while doing research on risk. The Black Swans are these unknown events . . . very, very rare, and completely unpredictable. But they have enormous impact. Ironically, we tend to rationalize them after the fact. 

The world of high-tech entrepreneurship is particularly well described by Taleb’s concept. There are hundreds of start-ups in Switzerland, and thousands are created around the world every year. But relatively few of them grow and survive. An even smaller number will be wildly successful.  . . . But using the term Black Swan implies much more than just business success.

Take Google and Apple, for example. These two companies are true Black Swans. The magnitude of the success and impact of these two start-ups was simply not foreseeable."

It is unfortunately a generally-held perception in the startup world (funded mostly by men) that these successful ventures can only be started by men under the age of 34, co-founded by a group of them who went to an elite school together. 

As a woman entrepreneur with 40 in her rearview mirror, who earned a degree with a 3.69 GPA from a non-elite school, I am offended by this statistic. However, it’s indicative of the tech industry’s and investors’ true bias against women. Because of my age, gender, lack of pedigree, and position as sole founder, I am categorically dismissed.

In 2004, Canadian Markus Frind single-handedly built and launched Plentyoffish (POF), and even though it’s an extremely unattractive site with undesirable members, The Match Group ponied up $575M and bought it from Marcus in July 2015. POF is a free site with its revenue generated by advertising of $100M per year. Frind had no partners or investors or debt. After 11 years, he walked away with $575M in his pocket. Not bad for a crappy dating site.

Why is no one investing in women entrepreneurs? 

A woman as sole founder or creator is treated not as a unicorn, but as a troll. Is it a coincidence that the new catch phrase in the world of startups dominated by men is "cock-roach?" So are the women pussy-roaches?

The "logic" underlying the label has to do with the resiliency of cockroaches; they're hard to kill, they'll allegedly survive a nuclear holocaust, they can survive on minimal food and water, and they move fast.

I'm not sure who decided to start the cockroach trend, but personally I think there are better creatures with whom to identify, whereby the symbolism is still applicable.

For example, instead of a cockroach, if you want an unattractive creature with similar traits for the metaphor, go with the Tardigrade. It can survive extremes in temperature, resist 1000 times more radiation than humans, and even survive in space. Tardigrades can live without water for over 100 years.

Also way better than the cockroach: Persistent and resilient Beavers are collaborative, great engineers, and adaptable. Per Spiritsofthewestcoast.com:

“The Beaver teaches people to have the ability to be productive in all ways and not to limit their options. He teaches to be persistent and to use available resources. The Beaver helps people to understand the dynamics of team work and to appreciate each individual’s talents and contributions in order to accomplish anything. He is a determined, builder of the mind, body and soul and symbolises creativity, creation, cooperation, persistence and harmony. The Beaver also is a serious, hard worker and will not quit his job until he is done.”

But as far as I'm concerned, the best new thing is: The Giraffe, which is why I've chosen it for my corporate logo.

Giraffes

A Giraffe is a messenger, encouraging us to elongate our vision, stretch ourselves, and reach as far as we can. It requires very little sleep (10–20 minutes per day) and has an immaculate ability to preserve its energy stores (more effective at retaining water than a camel).

It reaches for the tenderest leaves on the tree: the symbolic meaning of this is of seeking the best in life, reaching for the most satisfying morsels.

The Giraffe symbolizes having the vision to see that what you do today and the movements you make will create your tomorrows. Look into the horizon to see what to focus on, and where to put your attention, move slowly and deliberately. The Giraffe is always aware of danger that may not be visible. Learn discernment in your movements, careful to avoid danger and ambush by those who may want to bring you down. Keep watch at all times to protect your interests and the interests of those in your inner circle.

As a spirit animal, it is a totem of spiritual ideas. The horns on its head exemplify its intuitive nature, the horns being natural antenna into the spirit realm. The Giraffe actually has three horns, one of which is directly in the center of its head, the crown chakra. This enables the Giraffe with the mystical gift of foresight. It has amazing perception, the ability to perceive untruths and deception.

It teaches the importance of not being defined by someone else’s expectations. You are unique and have unique perspectives and strengths, to be honored. One of its powers is quiet observation. Epiphanies will rise from the depths, meeting you and acting as a compass for the next step towards your dream or goal.

Giraffe symbolism indicates change is on the horizon. Its colors indicate a strong connection to Mother Earth and Spirit. If a Giraffe is your power animal, you have great aspiration, reach for the stars, and know your gifts will take you on the journey of a lifetime. Stand strong, and be true to you, honoring what is more important to you.

Its neck symbolizes “sticking our necks out” in terms of making connections within family, community, business, creative endeavors, etc. The Giraffe reminds us of our remarkable potential to rise ourselves up to a challenge.

If the Giraffe is your totem, you’re a natural visionary and have a knack for seeing future trends. Giraffe-people see the big picture. They’re experts at shifting resources and influencing events so future outcomes are more fluid and effective.

The symbolic meaning of Giraffes also hints to strategy when gaining resources. Its favorite food is the acacia. The problem is, the acacia tree knows the giraffe's appetite for its fruits, and therefore emits an enzyme that purposefully makes its leaves bitter - hence thwarting the giraffe from eating as much. But the giraffe is endlessly resourceful and clever. This is where strategy comes in. Knowing the acacia's tendency, they approach the acacia tree upwind - hence avoiding the acacia's burst of wind-borne enzymes that alert other trees a herd is feasting upon them. This is a lesson for us to approach our goals and challenges "upwind" or from an angle that provides the most resources without spoiling the process of attaining the fruits of our desires.

The Takeaway

To the world of startups, venture capitalists, angel investors, entrepreneurs, visionaries, and trendy buzz-word creators: stop investing in mythological creatures such as unicorns, black swans, or extinct lizards! And get real. No one with any self-esteem or savvy wants to be known as a cockroach.

Sure, like cockroaches, bootstrappers can survive on very little. But in hundreds of millions of years, cockroaches have never evolved. And they run for cover when you shine a bright light on them. 

The call of the Giraffe is to rise above the crowd, to trust your instincts. Invest in a Giraffe. Better yet, invest in a female Giraffe. Invest in me.