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The Problem with Tech Unicorns

  1. Millions of users love the brands and leaders of these unicorns. Those tech giants have everything—except a way to achieve high profits.

  2. Three things have changed over the past 25 years.

    1. The rapid growth of unicorn companies has become easier due to the development of cloud computing, smartphones, and social media.
    2. Low interest rates have provided returns for investors.
    3. Some well-known companies (such as Google, Facebook, Alibaba, and Tencent) have demonstrated that wealth primarily comes from:
      • large markets, high margins, and natural monopolies
      • limited physical assets and light regulation
  3. Due to the contentious market for unicorns, profit margins have not consistently improved despite rapid sales growth.

  4. The lightning-fast idea of buying customers at any cost has peaked. After unicorns, a new, more compelling entrepreneurial approach must be designed.

Alas! Andrew Grove said—success breeds complacency. Complacency leads to failure. Only the paranoid (those who embrace change) will survive.