The Myth of the Unicorn: From Exception to Dangerous Standard
In the startup world, few labels carry as much weight—and temptation—as the word “unicorn.” Coined in 2013 to describe the rarest of startups, privately held companies valued at over $1 billion, the term has since become a kind of trophy. An aspiration and truly a magnet for media coverage, venture capital, and founder egos.
But somewhere along the way, something got distorted.
The unicorn label, originally intended to describe an outlier, is now treated as a benchmark of success. As if building anything less than a billion-dollar company were a failure. As if speed and scale were more important than solidity and sense. And that’s where the trouble begins.
Valuation ≠ Value
Chasing unicorn status too early often leads to decisions that are disconnected from long-term sustainability. Founders may rush to scale before they’ve validated that there’s a real, repeatable market. They may raise money they don’t yet need, at valuations they can’t justify, just to stay in the “hype loop.” Teams grow faster than culture can keep up. Metrics get inflated. Assumptions are treated as truths.
In that obsession with hypergrowth, one crucial question gets left behind:
Are we solving a real problem with a solution people are willing to pay for?
The Essentials Are Not Glamorous
Product-market fit is rarely sexy. Business model validation requires discipline, not just vision. Talking to customers, iterating with humility, and proving that someone will actually pay for what you’re building doesn’t generate headlines. But it does build companies that last.
Startups aren’t meant to be mythology machines. They’re supposed to be engines of value creation. That value might be economic, social, environmental—or all three. But it has to be real.
When Growth Hides the Cracks
Some of the most telling examples of the unicorn obsession gone wrong are startups that raised fast and scaled hard—without truly validating whether the market wanted what they were offering, or whether their business model could support the hype. In some cases, luck did not help either… However, when luck works in our favor, it’s not something we should factor into the equation—especially in the world of startups.
“Investors may have varying degrees of risk tolerance, but they are universally wary of anything that relies on improvisation or lacks foresight.”
Quibi
Launched with nearly $1.75 billion in funding, Quibi promised to reinvent mobile video content with short-form shows designed for on-the-go viewing. But it collapsed within six months of launch. Why? It didn’t validate whether users wanted yet another video subscription service. It failed to demonstrate real customer demand, ignored user behavior trends (people were already watching YouTube and TikTok), and overestimated its market size without strong data to back it up.
Beepi
This peer-to-peer used car marketplace raised over $150 million and was valued at $560 million, but never proved a sustainable business model. Instead of focusing on streamlining transactions and validating the core pain points, Beepi overspent on branding and infrastructure. It failed to match supply with demand efficiently—an early sign of poor product-market fit. The company shut down in 2017.
It’s always easier to analyze things in hindsight… however, instead of chasing unicorns, it would have been better focus on the revenue that comes from accurately assessing the potential market.
Jawbone
Once a hot consumer tech company valued at $3 billion, Jawbone made fitness trackers and audio products. But it couldn’t compete with Fitbit or Apple, and it failed to carve out a differentiated position. Rather than iterating based on customer usage data, it pushed products to market without evidence of lasting demand. It burned through capital and ultimately liquidated.
The Pattern Is Clear
In all these cases, what’s striking is not the lack of ambition—it’s the lack of disciplined validation. These companies either ignored or skipped:
- Demonstrating clear, growing customer demand with real use cases and engagement metrics
- Proving market readiness and a willingness to pay
- Backing their Total Addressable Market (TAM*) estimates with serious, research-based data
- Designing a repeatable, sustainable business model before chasing scale
(*) T.A.M. (Total Addressable Market) is the total revenue a company could generate if it captured 100% of its target market. It is a key metric for assessing a business’s growth potential.
In short: They obsessed with looking like unicorns instead of earning it.
Focus on the Foundation
Not every company needs to be a unicorn. Not every founder wants to lead a 10,000-person organization. And that’s okay. But the true value lies in building something profitable, respected, and lasting—even if it never reaches the magical $1B mark.
The obsession with unicorns is ultimately a distraction. A consequence treated as a goal. But success isn’t defined by valuation; it’s defined by value.
So let’s stop measuring ambition by how mythical we can become, and start measuring it by how meaningfully we can build.
