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Unicorns – the most coveted hunting trophy for every venture capitalist.
For those rare creatures grow with explosive speed from small promising startups to large companies valued at more than a billion dollars. And an investment at the right time can provide the return that finances the loss that must invariably occur on other risky investments.
As enticing as that scenario may seem, impact investors should abandon the dream of spotting the twinkling unicorns and instead turn their gaze to their ignored relatives: the zebras.
Series: New world – new economy
We need a showdown with the usual way of thinking of economics, and give much more space to nature, if we want to avoid exceeding the planetary boundaries.
That is the message from Graham Boyd, author of the book “The Ergodic Investor and Entrepreneur”. He professes ergodicity economics, a central pillar of an economy capable of delivering net positive impact, regeneration, and everything else needed for all life, including ourselves, to flourish.
In a series of conversations with Graham Boyd, we explore whether a more nature-based approach to economics is what is needed to create companies that have a more positive impact on the world.
You can contribute to the series with questions, criticism and ideas. Send them to carsten@impactinsider.
Graham Boyd, author of the book “The Ergodic Investor and Entrepreneur” and my regular conversation partner in this series on money and impact, thinks so.
Graham Boyd believes that zebras outperform unicorns in the long run – both in terms of returns and the social value they create.
“Investing in the hope of hitting a unicorn is a lottery strategy based too heavily on luck,” he says and continues:
“Zebras are designed to be resilient, stay alive and deliver a steady, solid return. So over a longer period of time, the zebras will give investors a better return. Over time, a zebra strategy will outperform a unicorn strategy.”
Zebras fix what unicorns break
Well then. But what exactly is a zebra?
The term emerged around 2017 as a reaction to a startup culture that favors rapid growth and high valuations.
A group of female entrepreneurs published the article Zebras Fix What Unicorns Break, in which they promoted a type of business with completely different characteristics from those of unicorns.
Zebras are born with a dual purpose: They must serve society while making money.
They focus on long-term, sustainable growth rather than short-term profit maximization.
They value cooperation more than competition, and like their four-legged role models, they are often found together in packs. And then they often consciously work with diversity and inclusion – both in the companies themselves and in the products and services they offer.
You can hear more about unicorns and zebras in my video interview with Graham Boyd here in the article.
And remember, you must finally send me curious and challenging questions for me to ask Graham Boyd in the upcoming episodes of our series.
You can write to me at carsten@impactinsider.dk
