Unlocking Unicorn Potential
Do small businesses and entrepreneurs want to grow big – and maybe make another million or 2? Or a billion? Few would reject more wealth – if amassed legally and ethically.
The method commonly used by the entrepreneurial establishment is the VC-Based Ecosystem with focus on product innovation and minimum viable product (MVP), strategy development assuming capital availability, followed by pitching for capital – and complaints about VC shortages when most entrepreneurs cannot get VC because sophisticated investors do not fund dreams.
On the other hand, the Unicorn-Entrepreneur (UE) Ecosystem can help entrepreneurs create more wealth, and control it, by using the unicorn secrets to takeoff without VC.
#1. Pivot from First Mover to Smart Mover.
Contrary to the current focus on innovation and capital, many Unicorn-Entrepreneurs (UEs), including Gates, Jobs, Dell, Bezos, and Zuckerberg, imitated the idea or used ideas that could be easily imitated. 99% succeeded with finance-smart strategies and skills. Innovation classes to develop innovative MVPs are less important than finance-smart skills to beat the MVPs.
#2. Pivot from Fast Growth to Smart Growth
To get high annual returns, VCs want fast growth, accept high risk, and fail on 80% of their ventures. UEs seek smart growth before Aha (Aha is when potential is evident) when capital is expensive, scarce, controlling, and dilutive; and fast growth after Aha when capital is cheaper. Bob Kierlin (Fastenal) used unicorn-skills to grow at 30% per year from internal cash flow (see Bootstrap to Billions).
#3. Pivot from Capital Intensity to Capital Efficiency
There is not enough capital to fund every entrepreneur’s dreams. VC is for the top, capital-intensive 100 (approximately) ventures out of 100,000 who then fail on about 80% of the ventures funded. 94% of Billion-Dollar-Entrepreneurs took off without VC by using capital-efficient skills before Aha, and smart capital after Aha.
#4. Pivot from VC-Control to Entrepreneur-Control
Before Leadership Aha, i.e., before an entrepreneur has proven leadership skills, VCs replace the entrepreneur with a professional CEO. They are said to have done this in up to 75% of ventures. Steve Jobs is a great example. After Leadership Aha, VCs want to fund the venture because of the entrepreneur’s leadership. Examples include Jan Koum (WhatsApp) and Brian Chesky (Airbnb).
#5. Pivot from the Silicon Valley elite to Global Talent.
The current VC-Based Ecosystem helps about 20 of 100,000 entrepreneurs – who are mainly from elite schools and Silicon Valley. To help entrepreneurs like Joe Martin and to build more unicorns everywhere, teach finance-smart strategies and skills of billion-dollar entrepreneurs to takeoff without VC.
#6. Pivot from Pitch Competitions to Skills Competitions
Pitches are the first step in the VC-Ecosystem, although no one consistently picks winners from startup pitches. That’s why more than 10 VCs rejected Jobs and Page and Brin. Switching to skills can build more unicorns, everywhere. These skills can be developed and rewarded.
#7. Pivot from Just Wealth-Creation to Wealth-Creation-and-Retention.
Early-VC is expensive and dilutive. To create wealth and keep more of it, Unicorn-Entrepreneurs avoid VC or delay it. Among 22 Billion-Dollar-Entrepreneurs, those who delayed VC kept 2x the wealth created than those who got VC early (The Truth About VC). And those who avoided VC kept a higher multiple. Sam Walton became rich by avoiding VC. Gates, Bezos, and Zuckerberg delayed VC to control it. Smart entrepreneurs focus not just on wealth creation, but also on wealth retention.
MY TAKE: Instead of wasting resources on VC-Ecosystems, the Unicorn-Entrepreneur Ecosystem can develop more unicorns for less, everywhere, by pivoting from first mover to smart mover, from fast flip to smart growth, from capital-intensive to capital-efficient, from VC-control to entrepreneur-control, from the Silicon Valley elite to global talent, from pitches to skills, and from wealth-creation to wealth-creation-and-retention.
