FORGET ABOUT UNICORN STARTUPS. INVESTORS ARE SEEKING FOR CAMELS NOW…
The term “unicorn” defines successful start-up companies, worth $ 1 billion. It was coined in 2013 by an investor named Aileen Lee. Nowadays, seven years later, Alex Lazarow, an investor from the same VC as Aileen’s, publishing a book called Out-Innovate: How Global Entrepreneurs — from Delhi to Detroit — Are Rewriting the Rules of Silicon Valley, in which he offers a new model of a successful startup, which he calls “Camel” Companies. Quite the opposite of Unicorn.
“Out innovate” was recently published (March 2020), during the current Covid-19 (Coronavirus) crisis, and its conclusions are ever more relevant. In his book Alex, analyses “Unicorn” companies who started as Startups, and he finds that most of them are losing money at most stages of their lives. Those are companies that require constant funding in order to survive. He compares them with another type of Startups. Companies who manage to get financially balanced, and sometimes even profitable. To the latter type, he calls “Camel” Startups. Those Companies succeed (with using the timely investment they raise) to grow and get balanced, and therefore more stable.
The test case at the center of the book is — how the two types of Startups, Unicorns, and Camels, are dealing differently in crisis time, and what happens if multiple crises were to happen to them. His conclusions seem to predict the current Silicon Valley’s crisis.
Source Credit: GeekTime