The Problem with Tech Unicorns13346 2019-05-04 02:50
Millions of users love the brands and leaders of those unicorns. Those tech stars have everything - except a path to high profits.
In the past 25 years, Three things changed.
- Growing fast became more accessible thanks to cloud computing, smartphones, and social media.
- Low interest rates left investors chasing returns.
- Superstar firms (e.g. Google, Facebook, Alibaba, and Tencent), proved that wealth is made by
- huge markets, high profits, and natural monopolies
- limited physical assets and light regulation
Because the unicorns’ markets are contested, margins have not consistently improved, despite fast-rising sales.
The blitzscale philosophy of buying customers at any price is peaking. After the unicorns, a new and more convincing species of startup will have to be engineered.
Alas! Andrew Grove says - Success breeds complacency. Complacency breeds failure. Only the paranoid (who embrace change) survive.