
The Rise of the ‘Unicorns’ - CapitalistCartr
http://www.nytimes.com/interactive/2015/04/01/business/dealbook/The-Rise-of-the-Unicorns.html
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washedup
I was impressed to see how little venture capital SpaceX has taken over the
years. Of course there was a lot of funding from Musk (is this the seed
funding in '06?), but very impressed to see them build out very successful and
complicated products with only a few hundred million before 2015. Looks like
they are now confident enough in their process and goals to begin accepting
lot's of venture capital.

It also seems to me that SpaceX should not be in this list. Being a company
that focuses on physical technologies, it is almost a different beast
altogether than the rest of the software-based group. Hard to compare it's
company and funding structure to the others when it involves a much more
complicated logistical chain, development period, and roll out.

EDIT: SpaceX has received almost $1 billion in funding from NASA over the
years. It's unclear to me, however, how this funding works. Is it an up-front
payment for future launches, or purely award money?

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mycroft-holmes
Serious question: do they count government money as VC money? Haven't they
received a considerable amount of money through NASA?

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bhauer
NASA isn't _investing_ in SpaceX, though, right? They're just paying SpaceX
for services rendered.

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rhino369
It's not technically investment but it sort of is. The government pays for
development of a product that might not even work.

But it's par for the course in that industry.

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corford
I know Evan Spiegel's a seriously smart guy but I can't shake the feeling that
Snapchat is the Myspace of the current batch of unicorns and he's going to
eventually regret not selling to FB or Google back in 2013.

Though I thought FB stock would slip and permanently stay under $30 after the
IPO so what do I know :)

From this NYtimes list, my two favourites are SpaceX and Stripe.

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imjk
Serious question, in what ways is Snapchat similar to MySpace? Poor UI and
disregard for user experience? Buggy code? Bloated executive team?
Bureaucratic management? The only parallel I see is that it's a trendy
technology among a younger cohort that tends to be very fickle.

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corford
The last one is the obvious one and I think it's big enough to kill them.
Unlike, say, Whatsapp, Snapchat's demographic is extremely teen & early
twenties heavy. That's the worst demographic to be in if you're a hip
app/product/service looking for longevity (and your only real party trick is
messages sent through your service are ephemeral). Users in this demographic
are also terrible for monetising (unless you're a game :) ).

Having said all that, I'm judging it from anecdotal evidence available to me.
None of my friends use snapchat (all late twenties and early thirties) but
they do use twitter, fb, vine (on occasion), whatsapp etc. The only people I
know that have snapchat on their phone and use it regularly are all < 23 yrs
old. Of course, could simply be my friends and I are totally out of touch!

Edit: interestingly, just realised none of my friends (female or male) use
pinterest either (which, from what I've read, has a wider demographic). So
maybe we're just a bunch of luddite weirdos...

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the_watcher
I'm 26, one year ahead of Spiegel in school (my brother was his year at
Stanford), and I don't use Snapchat (I have an account, I download it maybe
every other month to see what's changed, but have never been able to get into
it). I'm an outlier in my social circles. All my friends use it. Also, a few
weeks ago, Bill Simmons (Grantland creator) used it while at Wrestlemania. One
year ago, he would have tweeted it from @GrantlandLive. Grantland has been
really good at leveraging social technology, and were ahead of the curve on
livestreaming, so to me, the fact that basically everyone I know my age and
younger uses Snapchat, and that an organization that's done a great job using
social tools is starting to try and figure it out tells me that its here to
stay for at least the near future.

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lifeisstillgood
I really find SpaceX fundamentally _unfair_. It's as if The USA politically is
jammed, but the administration just kind of ignores this and goes around
making killer long term investments in everything from NASA to biotech. And
it's not like this is SpaceX getting the fat from the US - they deserve it,
it's just that it's an American thing - no other nation is even close to
"let's fund private capital to learn from public investment" on this scale.

Never mind the also-rans like Uber or airbnb, who frankly are just playing
fast and loose with the rules, and never mind the companies like square or
stripe or Dropbox who are using new technology to solve old problems, the real
reveal in this list (and my poor knowledge of the other (70!) billion dollar
unicorns, is that American public investments made decades ago are paying real
dividends in private capital even today.

And the UK? We don't even have an aircraft carrier. The last time we landed
something on Mars, it was not the result of a pipeline of funded missions, it
was a one time try out.

Damn it. We are going to have to go European if we want to go toe to toe with
US, India and China.

And those investments start today, and trust me, our politics is too jammed up
to make them.

So who has been making yours? Can we borrow them?

Edit: just to clarify, _yes_ SpaceX / Musk really took risks and deserves the
rewards. _yes_ , they are "just" borrowing NASA technology. And that's the
point. Only the US has the technology to borrow and the willingness to hand it
over to the private sector. That's kind of the unfair bit

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AlexMuir
Snapchat and pinterest are the two anomalies in that list. The rest are real
businesses with meaningful revenue.

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mhartl
A couple of quick observations:

* Three of the ten unicorns (Airbnb, Dropbox, and Stripe) were funded by Y Combinator, while a fourth (Pinterest) was founded by two-time YC alum Ben Silbermann.

* All of the unicorns are headquartered in California. Eight are in "Silicon Valley" (i.e., the actual physical valley plus San Francisco), and two (Snapchat and SpaceX) are in Los Angeles.

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gitah
The list didn't include Xiaomi (not in California) which is the biggest
unicorn of them all at a 45M valuation.

But it also missed a lot of other Californian unicorns like Theranos.

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mhartl
You mean $45 billion?

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venomsnake
Has any of these Unicorns been in the black?

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corford
At a guess, Stripe probably is or has been. SpaceX maybe too if you count the
NASA cash as advance purchase for future service.

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peter303
It was Fortune Magazine that started this meme of billion dollar startup
companies a few issues ago. A Unicorn might be "too good to be real".

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gitah
Incredible how fast the term "unicorn" got popularized. Word of the year of
2015 for sure.

I'm also betting on the term "uberpreneur" to blow up soon, which refers to
people making a living off the on-demand economy.

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kraig911
Uber kind of seemed over valued to me compared to the likes of SpaceX, DropBox
etc. Is it really worth that much?

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sremani
Uber is not over valued. They are about to re-define, the transportation and
logistics of the whole world. Of course they are lot of rough edges and they
are facing bureaucratic walls and demonstrated some old Microsoft style Evil
Empire style tactics, the company reeks of Domination mentality and they have
enough traction. Where Lyft et al. try cultural things to attract, Uber is an
efficiency monster. Their coverage is bigger and better in terms of both Areas
of the Cities (esp. DFW) and platforms (including Windows Phone). There is lot
of potential increasing the taxi market share as well as expanding into other
markets/services like delivery etc and/or making fleet arrangements with
Cities or Companies. of course the futuristic self-driving cars and de-
coupling transportation from car ownership is a vision Uber rightly fits into.

If I can buy Stock, I will bet my House on Uber.

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washedup
Uber will be in a great spot if they are thinking about integrating the
technology with self-driving cars. That's how the landscape will most likely
look in 5-10 years. Uber + Car Sharing + Driverless cars.

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mark-r
I think your time line for driverless cars is unrealistically short. It will
be a very long time before we trust the technology enough to allow a car where
there's no driver to take over in an unanticipated event.

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CPLX
And even longer still before it's __economically __more rational to do so,
versus paying one of the many low skilled workers handling the job now.

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rhino369
If we had cheap self driving cars, it would be immediately economical. Those
cheap low skilled workers are still taking 80% of the revenue.

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dougabug
The Uber drivers are paying for the cost of the car, gas, maintenance,
parking/garage, most of the insurance, etc. plus supplying the labor, while
Uber takes probably around 80% of the profit. Getting rid of the driver means
that Uber would have to spend ~$50B to put a million self driving cars on the
road, which would immediately start depreciating. Plus it will need thousands
of well situated facilities necessary to garage, maintain, and dispatch them.

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eli_gottlieb
Look, if you start re-using the term for "thing that's impossible to find
because it doesn't exist, but people go around looking for it nonetheless" for
"many really large Silicon Valley companies", I think it's time to declare a
bubble has inflated.

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gdubs
One must allow for some poetic license...

Most startups tank. The reason they're calling these companies unicorns is
because of how rare success is, especially at this scale. They don't mean
literally that these companies are imaginary.

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synaesthesisx
"Venture capital" valuations ≠ real money. Bubble burst in 3...2..

