Startup Community: We need zebras, not unicorns! – The Post

Startup Community: We need zebras, not unicorns!

Way too often, magical thinking about fantasy creatures drives the startup economy – but what we need now is a strong dose of reality.

Be a startup lion and chase that zebra (photo: Pixabay)
August 18th, 2019 5:00 pm| by Thomas N Horsted

The current technology and venture capital structure is broken!” This was the conclusion I was introduced to about a year ago, when I first heard the term ‘zebra’ in the startup world.

The premise was that chasing ‘unicorn’ companies bent on quantity over quality, consumption over value creation and quick exits over sustainable growth was a game that could not be won.

Only a lucky few profit, while society suffers. The gap between the world we need and the world that exists is growing. And we need founders and a startup community who organise around it!

Profit and purpose
Alternative business models that challenge the status quo are more important than ever. Balancing profit and purpose, championing democracy and privacy, and sharing power and ownership will become the new standard praxis in driving a more responsible society for customers and communities.

Journalism, education, healthcare and government are just some of the sectors in which we need to build companies to nurture, not raze to the ground.

Enter the zebra
This new movement has a new symbol: the zebra. Unlike unicorns, zebras are real.

While zebra companies are profitable, they are driven by a purpose to improve society. They live in groups where they protect and preserve one another. The collective, after all, is stronger than the individual.

Zebra companies solve real, meaningful problems and repair existing social systems. But they struggle for survival because they lack an environment that supports and nurtures them.

But what if enlightened investment in enlightened companies led to stronger returns? What if companies that stood for something were more profitable and more sustainable? Patagonia, Warby Parker and Etsy are just a few examples. The world needs more!

Zebra challenges
The problem isn’t product, it’s process. Building more won’t solve the biggest challenges. We need to invest more in the process and time it takes to help adopt, deploy and measure the success of innovation.

Zebra companies are often started by under-represented founders. Although 30 percent of businesses are started by women, only 3 percent of venture funding goes to women, and 1 percent to people of colour.

Zebras are stuck between non-profit and for-profit. Pursuing both profit and purpose can be expensive and time-consuming, as finding alignment with strategic partners and investors can be hard.

Impact-investing is narrow and risk-averse. Most of it is restricted to verticals like clean technology, finance or global health. This limits innovation in other sectors that desperately need it.

Thomas N Horsted

Thomas (@thomas_hors) is the former co-founder of Startup Guide – The Entrepreneur’s Handbook and a former startup scout for IKEA Bootcamp. He is currently the COO for Tiimo, a Danish startup delivering an assistive app to kids with ADHD, autism and brain damage. He is also a limited partner and investor in The Nordic Web Ventures, which invests in early-stage Nordic startups.