Excellent post by Brad Feld on the emerging Unicorpse phenomenon (One time unicorns that failed to maintain momentum and valuation.) He mentions some of his prior experiences…
I once was on the board of a company that had generated lifetime revenue of $1.5m and was acquired by a public company for $280m of stock which, by the time the deal closed, was worth around $1.1 billion. Two years later, the public company (which at one point was worth over $30b) was bankrupt.
None of these companies were ultimately worth $1 billion or more. Each of them stumbled for different reasons, but a lack of obsessive focus on product and customer was a big part of why they vaporized. They assumed, regardless of how much capital they had, that they could raise more. They didn’t focus on building a long term, sustainable business that had a huge protective moat around it. I don’t care how disruptive you are – if you don’t build a moat, someone is going to come disrupt you.
The big message here by Brad and it is one that I would echo is – Focus on product and building a great company. Manage your burn. Never assume that money will always be available. Have options. Don’t focus on valuation.
Any views from company leaders and founders on this?