No surprise, a lot of unicorns are actually donkeys.
I’ve been having this conversation a lot lately:
Friend: “Did you see [startup] just raised at a $1B valuation?”
Friend: “They’re apparently killing it on [metric that is meaningless without the bigger picture].”
Me: “Yeah, but their [metric that also matters] is struggling.”
I am by no means the unicorn prophet, but here’s how I think about which companies have earned their unicorn status vs. which ones are playing a dangerous game of massive capital needs, sky high valuations, impossible expectations, and deferred judgement days. Hopefully, by the end of this post, you’ll have an intuitive feel for which startups actually have a shot at being unicorns and which ones are probably just donkeys.