Be a Donkey, not a Unicorn
Estimated Reading Time: About 3 minutes
Until 1901, unicorns were extinct on planet earth.
But then something miraculous happened. 10 different steel companies merged together to become the US Steel Corporation, with a value of 1.4 billion dollars. Just like that, a unicorn was born.
A unicorn is a company that is valued at over 1 billion dollars.
The term was first used by Aileen Lee, an angel investor that has invested in hundreds of startups.
A unicorn is supposed to be a rare and beautiful thing. Something that you see very few of and is protected at all costs. These days companies raise so much money at inflated valuations that it’s really not that difficult to get to a unicorn status.
Let’s look at an example:
Travis VanderZanden found electric scooters when shopping for bikes to give to his two daughters on Christmas. He had already spent time working in executive positions at both Lyft and Uber, and this seemed like an interesting opportunity.
He started his electric scooter company in 2017, and kicked things off by raising money to fund the operations of the company and start expanding.
The exact numbers aren’t clear, but it looks like Bird raised 15 million dollars in their series A, 100 million in their series B, and 150 million series C.
At their series C round they claimed the status coveted by founders all over the world. They became a unicorn.
Click here for a beginners guide to how companies raise money.
Fueled by a total of 13 funding rounds, and over 900 million dollars invested into the company, Bird became one of the fastest companies to gain unicorn status.
But let me ask you something. When was the last time you saw someone riding a Bird Scooter?
They are littered all over your town, but do people actually use them anymore?
Well, in 2021 Bird went public via SPAC at a valuation of 2.3 billion dollars. How much is it worth today?
Today its market cap is 62 million dollars.
If you had invested $100 at its IPO, then you would have $4 left today.
Not exactly a great investment.
Should you be chasing after Unicorn status?
Absolutely not.
Just because you are a unicorn does not mean that you will be a successful company.
Build a Donkey instead.
A Donkey is consistent, reliable, and gets you where you need to go. It’s not fancy or sexy, but it will put its head down and work day after day.
A Donkey doesn’t try to be anything that it’s not. It works hard, it’s smart, and churns out cash flow for your business. It doesn’t rely on trends or hype.
Need an example of a Donkey?
Get out and go for a drive. Look around and what do you see? A mechanic shop that has been there for 50 years. Across the street is a restaurant that serves the best Mexican food in town. The owners of these businesses don’t have to worry about raising money or trying to stay ahead of the times. They provide a consistent quality product.
Be a Donkey, not a Unicorn.
We owe you all an apology. We know it’s not Tuesday, so today you get some Wednesday Terms. Lucky you!
Be sure to vote for next week’s Tuesday Terms.
Take 2 seconds to click a link and give feedback on this post.
With your feedback, we can improve the newsletter. Click on a link to vote: