I recently met two “younger than me” entrepreneurs who are part of a group of millennials eager to start and grow businesses, but who do not want to be classed as “unicorns”.
Nor do they aspire to be “uniconic” and, moreover, feel that by not having that aspiration, others look down on them as starting “second class” businesses.
In the US, scale-up fades as company builders move from unicorns to zebras
So, I did a bit of digging, as “scale”, “scaling-up” and “scale-up” are hot topics now in Scotland since Sherry Coutu CBE published her Scaleup report on UK economic growth in November 2014. So why is Scotland and its economic development ecosystem now switching on to this?
Well, for sure an entrepreneur, a business or a team that wants to grow rapidly should mean more jobs created, more taxes paid and, consequently, more prosperity. Creating unicorn-type companies – mostly tech – appears to be the order of the day as a few chase this fabled status.
But, we must be very careful that we do not set up a scale-up policy and doctrine that makes a few at the top even richer, while at the same time excluding a generation of business builders from the party as they do not get an entry ticket.
I am involved with hundreds of businesses across the UK, all keen to grow and do well. But, when I suggest to them that if they are not interested in being a unicorn, they therefore lack ambition and worth, it gets their hackles up.
People start businesses for a variety of reasons. They do not all start out to be multi-millionaires and stand on stage telling everyone their story. To many who start businesses, creating ten jobs over a two-year period and a company doing well is classed as “success”. And I know many examples right now of business builders who are in this very position.
So here is the question: would it not be better for Scotland to create 50 companies across our land that each create and sustain 50 jobs and work with each other, as opposed to creating one unicorn that has 500 jobs and sits alone and will probably be sold to the Qatari Royal Family?
And this is where my research became interesting. In the US, the scale-up mantra is now fading as investors and, more importantly, company builders move away from wanting to create unicorns to creating zebras.
This new movement of entrepreneurs and the eco‑systems that support them are turning away from unicorn status seeking. For them a unicorn is all about private individuals, investment houses and shareholders doing well with ridiculous valuations. For them, unicorn means being part of a hegemonic class that want more money and power and status. Is that what we want in Scotland?
I’m not so sure. The zebra company has a different focus. For one, zebras are real and not imagined. Zebras stick together and protect each other in times of crises. They are profitable and good for society as they are created around sustainability, not a ten times valuation on exit. Zebras look for mutualism in eco‑systems and not monopoly.
They create and regenerate jobs, and, while entrepreneurial, are not built to sell, albeit this opportunity is available. Imagine if we had a culture where zebras were celebrated. One or two may go on and grow and employ more people. But, the purpose of the zebra is to create profit with purpose and social impact as well as make money for investors.
To all the companies out there – start-ups , early stage ventures and business builders – do you want to be a zebra or a unicorn? And what does the answer mean for the Scottish economy? If the answer is a resounding “yes, we want to be unicorns”, then I don’t have the answer to that. I don’t think Silicon Valley will ever be created again in a European country.
If the answer is “yes, we want to create a country of zebra companies”, we have a better long term chance at prosperity coupled with the talent and capacity to make it happen.
• Agitator and disruptor Jim Duffy is head of #GoDo at Entrepreneurial Spark