There are currently 161 companies listed with ‘Unicorn’ status, resulting in a cumulative value of $567B. The list is as intriguing as the mythical beast itself with a few familiar (though many unfamiliar) tech companies featuring. While their exponential rise has been well documented in recent years, there are strong indications that their fantasy statuses and values are winding down with large doses of reality.
Unicorns (Uber, Spotify, Dropbox & Pinterest to name a few) are the nickname of privately owned tech companies valued at $1 billion or more who have risen rapidly through VC investment as opposed to direct customer revenues or advertising. Their key uniting asset is how they have disrupted industries filled with big, entrenched incumbents, with an idea and a smart tech solution, most often in the form of an app.
Unicorns notably disrupting the media and advertising worlds include Snapchat ($16bn), Pinterest ($11bn), Spotify ($8.53bn), Vice ($4bn) and Buzzfeed ($1.5bn).
Their meteoric rise is often a function of the number of users they attract to their product and the view that at some point the monetising switch can be activated for happy fortunes. Facebook famously floated with much scepticism at $104bn (McDonalds is valued only at $94bn), yet just four years on and their revenues of $17bn are not far off the $24bn of the burger chain, only with far less cost.
The real clear and present challenge however, is that while they seemingly offer different services in different industries, they are all in fact largely competing for the same piece of value, ‘consumer attention’. Attention is the currency that excites the advertising trade and enables their revenue models to work. Attention however is also the consumer’s most valuable asset, and it’s finite. This means that while the unicorns look to users, they really should be caring more about share of attention, a metric that gives us as advertisers a greater opportunity to connect and be relevant.
Continual Innovation will be a key part of any future success and perhaps also other unicorns on the list, such as Medallia, a company that aims to hardwire the customer into every decision. Unicorns that fail to demonstrate how their users are unique and attentive, will ultimately lose the power of what they ‘r’ and ultimately become just that, Unicons.