We're not talking about the animals. They're cool though.
What I'm talking about is the opposite of a unicorn startup. To revise, a unicorn is a startup or company with a market cap of over $1bn. To get there, you have to do a lot:
- You have to take severe risks
- You need to grow fast - incredibly fast
- You need to grow a large user/customer base
- You need to be 10x better than the competition
This comes with sacrifices. It's no coincidence that a majority of these startups fail, because failing in this context is the failure to grow exponentially year-over-year, being shut down by the pressure of numerous investors.
Many to-be-unicorn founders fall into the trap of hustle porn: Sleeping short hours, working long hours. Spending weekends and nights in the office, and bragging about it.
But what many people don't know is that there is a space for a different kind of startup: Zebras.
A Zebra is a smaller, but profitable company, that is focusing on user success, sustainability, quality and community. As big companies grow (or implode), they often leave gaps in the market, that Zebras can solve. From a customer perspective, they have some big advantages over working with a unicorn.
- The same way that you might like to purchase your bread from a local bakery instead of a super market, Zebras concentrate on quality, customers and product over big profits and valuations.
- As a customer, you're always going to be a priority, because you are their capital (whereas in unicorns, pleasing investors might be more important)
- They can fill a specific need, that might be too small for unicorns
When I talked about this with other founders, the question that arises is usually "why would I build a small business, when I can try to build a unicorn and get rich?". The answer to that is a simple calculation. Would you rather:
- Own a 80% stake in a $40MM company, with 50% chance of success?
- Own a 8% stake in a $400MM company, with 10% chance of success?
Ignoring the monetary stake here, I also have the opinion that there is a need for more Zebras. Smaller startups, that concentrate on a specific niche and try to solve every problem in that niche for their customers. It's an important step to go back to an "artisanal" internet, that is not controlled by big multi-billion dollar corporations.