ON Partners, over the last few years, has collaborated with Niche and its CEO to grow its executive leadership team.
UNICORN OR SHETLAND PONY?
A USEFUL GUIDE FOR EXECUTIVES
By Matt Mooney, Partner
MARCH 16, 2016
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.
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.●
Explore: Our Resources
About ON Partners
Since 2006, ON Partners is the only pure-play executive search firm building diverse C-level and board leadership teams. We rebuilt the institution of executive search for the way you work. Our approach includes present partners who engage with their clients from the first brief to the final decision, individually crafted solutions that are unique to each client, and an easier experience all around. Named by Forbes as one of America’s Best Executive Recruiting Firms and to the Inc. 500/5000 Lists nine times, ON Partners is consistently ranked among the top 20 retained executive search firms in the U.S.
Untraditional by Choice. Original by Design. Since 2006.
START YOUR JOURNEY WITH US TODAY.
If you want to create a new path – ON Partners knows how to help you get there.