on news

footer news ticker

resources.

UNICORN OR SHETLAND PONY?

Mar 16, 2016 | ON Blogs

A USEFUL GUIDE FOR EXECUTIVES

By Matt Mooney, Partner
MARCH 16, 2016

INFOGRAPHIC

 

x

Unicorn — Beloved mythical symbol of all things lucky and good. In the venture capital industry, a unicorn refers to any tech startup company that reaches a $1 billion dollar market value as determined by private or public investment.

Shetland Pony — Stubby equine whose top career option typically involves a starring role in a low end, roadside carnival.

x


x

In markets like this when things get particularly frothy, there is always the temptation to describe the environment with the dreaded “bubble” word.  Currently, there are a handful of massively disruptive, industry shaping companies like Uber, Airbnb, Tesla, and others that are often described as Unicorns.  These companies have separated from the pack based on market success and enterprise valuation.  There are a number of other companies in each sector trying to emulate the Unicorn’s success, the lower end of this scale filled with companies we will describe as Shetland Ponies.  The Shetland Ponies often try to cut corners, assume they are different and smarter than the rest of the market, or fall into obvious pitfalls that are completely avoidable.  Here are a few key differences between the Unicorns and Shetland Ponies:

 

Look for a Company with Legitimate Funding – While it is hip to have rock legends and movie stars invest in your company, it is probably best if your funding is led by strong institutional investors with a track record of actually growing and developing companies and making the hard decisions necessary to become a unicorn.  There is about an equal chance that the average high school football player makes it to the NFL as your start up goes from $0 to $2B valuation because this stuff is really, really hard, and most companies will not make it.  You need as many smart people on the Board as possible, so bet on the company that picks the experienced, boring money with a better batting average.  A strong Board of directors certainly increases chances of success and sets the tone for the overall business.

How About That Management Team – If we look back at early, proto-Unicorns like Google or Facebook, they had brilliant, entrepreneurial founding teams that were smart enough to hire business professionals to help run the day to day business and avoid some of the pitfalls that every company will face when growing at an exponential rate.  Smart, confident founders are not afraid of constructive feedback, and welcome other smart business leaders to the management table.  Companies that do not recruit and retain strong leaders from the outside typically end up with no one running the company.  The charismatic founder is off doing high level strategic initiatives, and the day to day operations are left to lower level staff leaders without the business experience to lead hyper growth.  If the average life expectancy of outside executive hires is less than a year, it is likely a Shetland Pony, not a Unicorn.

Human Capital Matters – Look for companies that put a huge premium around Human Capital and have gone the extra mile to hire a world class leaders in Human Resources and Talent Management/Recruiting.  While a CFO is great with numbers and could manage HR, when it comes to the nuances and softer skills that create a dynamic, sustainable culture, there is no substitute for leaders who truly understand how to recruit, retain and develop world class talent.  The reality is, most companies don’t fail because of technology or market conditions, most companies will fail due to a culture and talent pool that does not measure up to Unicorn status.  A strong HR executive, working closely with an experienced board and senior team, can be a significant differentiator and greatly impact the chances of success.

 

While every company aspires to be a Unicorn in an exciting market like the one we have now, the reality is, most companies will not get there.  It is historically difficult to ultimately predict success, but you can get good at identifying some of these key derailers that are difficult for even the hottest companies to overcome.  Also, if a company describes itself as “The Uber of the (fill in the blank industry)” it’s likely to end up in the Shetland Pony category as well.  Not all companies can be Unicorns, but you should be able to avoid ending up at Shetland Pony, where you’d waste some of your peak executive years enduring the business equivalent of giving kids rides at a low rent carnival.●

x

Explore: Our Resources

Archives

+

connect with ON.

Bring ON executive search insights!
Sign up to receive thought leadership pieces, ON in the news, recent placements, quarterly updates and more.

ON resources.

ON in the news

THE EVOLVING PRIVATE EQUITY RECRUITING MARKET

Published in Hunt Scanlon Media's Private Equity Recruiting Report 2020. Jeff Hocking is a partner at ON Partners with over 20 years of search experience. Previously head of the North American technology practice at Korn Ferry, he serves private equity and major...

RANKED ONE OF THE MOST PROMINENT RECRUITING FIRMS IN NEW YORK

ON Partners named on Hunt Scanlon’s annual roundup of the 60 most prominent executive search firms in New York. Connect With ON October 2020 - ON Partners, the experience-driven retained executive search firm, is proud to be named to the New York Power 60 list...

ON successful placements

SUCCESSFUL PLACEMENT: NEW WAVE DV – PRESIDENT

New Wave Design and Verification Appoints New President Connect With ON  (GLOBE NEWSWIRE) -- New Wave Design and Verification (New Wave DV), a leading provider of high-performance digital electronic interface solutions for the Defense/Aerospace market, is proud to...

SUCCESSFUL PLACEMENT: SOLARWINDS- VP, NORTH AMERICAN SALES

SolarWinds Appoints Jared Thomas to Vice President, North American Sales Connect With ON  SolarWinds (NYSE:SWI), a leading provider of powerful and affordable IT management software, has appointed Jared Thomas to Vice President, North American Sales. Jared Thomas...

a better experience gets recognized.

ON Partners named to the Weatherhead 100 Case Western University annual ranking of the region’s fastest growing companies
ON Partners named by Boston Business Journal’s Largest Executive Search Firms and Minneapolis/St. Paul Business Journal’s Twin Cities Largest Executive Search Firms
ON Partners six time Inc. winner by being name to the Inc. 500/5000 Lists and to the Inc. 5000 Hall of Fame
Hunt Scanlon names ON Partners executive search firm to the Private Equity Recruiting Power 75 list
Business Insider ON Partners Executive Recruiters
Fortune ON Partners Executive Search
Fast Company ON Partners Executive Search Consultants
ON Partners named by Forbes as one of America’s Best Executive Recruiting Firms

ANNAPOLIS • ATLANTA • BOSTON • CLEVELAND • DALLAS • MENLO PARK • MINNEAPOLIS • NEW YORK • SAN FRANCISCO

© Copyright 2019 On Partners. All Rights Reserved.