Harvard Business Review Writes On Unicorns Being Over, Camel Startups Being In
By Katyayani Joshi
In today’s world, unicorns symbolize something more than valuation. Unicorns have become a philosophy, ethos, and process of building startups.
When one startup strives to be a unicorn, it needs tools like abundant venture capital, a deep and ready talent pool, and a supportive startup ecosystem, which was easily manageable before the pandemic, which led to the flourishing of startups.
But, the world has changed post-pandemic. The global recession caused by COVID-19 has led business leaders, innovators, entrepreneurs, and investors to struggle with the challenging conditions in the market.
What Are Camels?
The business ecosystem outside the bay area bubble- where startups have less access to capital, especially in emerging markets, is more prone to unpredictable and severe macroeconomic shocks.
Instead of the unicorn, the camel should be the more appropriate mascot for these businesses. Unlike unicorns, camels are not animals of fictitious land. Camels are real and resilient. Camels are able to survive for long periods without food and water, withstand severe variations in climate, and can sprint rapidly for sustained periods of time.
Here’s why startups should be camels instead of unicorns.
Camels Don’t Subsidize The Product
In Silicon Valley, entrepreneurs are ready to subsidize their products to increase their customer base. They do not pay attention to costs and profitability.
Camels charge their customers for their products and do not believe in subsidizing. Camels understand that a product’s price is not an obstacle to its adoption. It reflects its quality and positioning in the market. The innovators should offer the customer a solution worth paying for. This would automatically lead to a better customer base.
Camels Manage Costs and Capital
Camels manage costs through the life cycle of their companies. New hires in the companies need to be justified by increases in revenue and operations. Spending levels and investments are regulated so that the business doesn’t go too far down the cost curve hole.
Venture capital is one of the most powerful tools of a startup. Whenever camels raise venture capital, they raise appropriate amounts for fixed purposes. This helps the entrepreneurs to maintain greater control of the business.
Camels Have A Long Term View
Running a business is not a short-term endeavour. Camels understand this and make survival their number 1 strategy. The race is never about, who gets the market first, it is about who survives the longest.
Camels grow in controlled spurts. They choose to accelerate and invest in growth only when the opportunity is right. The camels preserve the option to adjust growth and head back to a sustainable business if needed.
Like camels, business camels also adapt to harsh conditions. The world has got a lot of unicorns that have got their dream world. Now, the world needs camels who have steeled themselves for tough times.
Originally published at https://edtimes.in on January 20, 2023.